Disclaimer: This is my own personal opinion. StackExchange is not a site for personal opinions, so I will do my best to rationalize my opinions properly, but it's up to you to make your own judgements. (I apply this disclaimer because if I don't, you get really strange tail chasing loops that arise from applying my argument against itself)
I think you can make amazingly lifelike worlds which are distopias that don't know they're distopias. There's so much life to be had in them. If you want to see where they can go, just watch videos of children in poor destitute places, with their sparkling eyes full with excitement. There is something in them that everyone wants to capture, just for a brief moment, before the environment around them causes their eyes to go dull (often from hunger or sickness*). We love these moments because, even if just for a brief moment, we get the impression that this happiness, knotted and entwined around a child, just might last forever. Just maybe.
We live for those maybes.
So, where can we start?
From Wikipedia, we can define a dystopia:
A dystopia (from the Greek δυσ- and τόπος, alternatively, cacotopia, kakotopia, or simply anti-utopia) is a community or society that is undesirable or frightening. It is translated as "not-good place", an antonym of utopia.... Dystopias are often characterized by dehumanization, totalitarian governments, environmental disaster, or other characteristics associated with a cataclysmic decline in society. Dystopian societies appear in many subgenres of fiction and are often used to draw attention to real-world issues regarding society, environment, politics, economics, religion, psychology, ethics, science, and/or technology, which if unaddressed could potentially lead to such a dystopia-like condition.
In all good dystopia literature I have read, one of the key feelings that persists through the book is the inevitability of the negative side of the culture. It must seem like that negative side cannot ever be overcome and will inevitably devour all that is good. This has the effect of snuffing out hope. As long as there is hope that a miracle might occur and save everyone, hope persists. In the true dystopias, hope for that miracle has run out. Thus, for your world to be a dystopia, there must be no hope for change.
In order to "forget" you live in a dystopia, one of two situations must occur. The first must be that you cannot imagine a way to view the world such that it is bad. This can be very difficult to achieve for a government, as imagination is a key part of what makes us human. A dystopia that takes the humanity out of us either eventually falls to ruin, or has to suggest there is something more. Writing about a civilization that is inevitably falling is a common approach. It's generally accepted that death is a part of life, so the death of the civilization may simply be part of a greater cycle of life. If you argue that life was eradicated by the civilization, or if you want the civilization to provide "something more" which offsets the dystopic sides, you have chosen to write a very difficult piece, philosophically, so the best I can do is recommend reading a great deal of philosophy on the subject before starting. It can be done, it's just a challenge.
However, this is not the only way to be unaware of the dystopia surrounding you. The other possibility is that the dystopia makes it unfeasible to take the measurements needed to identify the dystopia. This is the subject of countless stories involving individuals locked in simulations. It's also the subject of a famous philosophical thought-experiment, known as the "Brain in a Vat" experiment. The effects of this thought are questions regarding "what is reality," because what we intuitively think it is and what we actually measure empirically do not align in this experiment.
At this point, it's worth asking a key question about the creation of creative works like dystopian stories: why do we do it? What is their purpose? For this answer, I would like to suggest a valid answer to this question is to inspire something in people that is difficult to inspire in a more direct manner. We want to show the reader a part of life that we think they should experience, but may never experience directly in their lives.
One such moral which could be very pertinent to this kind of story would be how to break free from an illusion. We see these morals in 1984, though:
By the end of 1984, we find that Winston has broken free from any illusions, and can see the dystopia full on. However, the dystopia crushes him shortly afterwards.
Personally, I find those kinds of morals drawn from 1984 weaker than I like. Call it personal preference, but I'm a sucker for a happy endings. I find they encourage the right mindset to draw as much value from the story as possible.
Of course, we can't have a dystopia toppled by one individual. That suggests the dystopia was weak, and your central villain in the story becomes a straw-man, ready to be burned in an effigy of moral rightness. What good is the eternal bad guy if he gets broken too easily. I suggest one of two outcomes which I believe make an illusion within a dystopia worth reading. The first outcome is to have the dystopia toppled by the main character. To do this without the dystopia looking weak, we're going to need to have a series of fortunate events which render the dystopia's weak spot visible. This can be a terrible source of Deus ex Machina style writing, so I highly recommend treating this reveal as an act of magic. Thinking of it this way lets us invoke Sanderson's First Law of Magic:
Sanderson’s First Law of Magics: An author’s ability to solve conflict with magic is DIRECTLY PROPORTIONAL to how well the reader understands said magic.
You will need to make sure the reader feels very comfortable with why the dystopia found itself in this position. It's up to you to decide why. If I were to choose a reason, I would have my government build itself on set theory Russel and Whitehead's work: Principia Mathematica, which tried to build a mathematical tower of babel, proving every true statement in arithmetic mechanically. This would then give me an opportunity to bring up Godel's Incompleteness Theorem, which sent their tower of babel crashing to the ground in a beautiful show of logic. Of course, for some reason, college level mathematics is not a common topic in fiction books. I can't imagine why. (the only author I know of to try is Douglas Hofstadter).
If you don't want to try to rationalize the perfect storm to destroy your dystopia, perhaps we can use the unknown to our advantage. What if it's not clear whether the dystopia is defeated or not? While we may not like it, we do deal with the unknown every day. A story offering ways to act when facing impossible unknowns may provide great value to them.
One of my favorite approaches for this is to have the main characters, as they wake up from their dystopia, act in a way which has an infinitesimal likelihood of having an indelible affect on the dystopia. Multiplying eternal changes by infintessimal odds always leads to interesting outcomes. The math isn't clear, so there isn't always a right answer.
However, what if the character has an easily provable "good" effect on the world, it's just very fleeting. Perhaps its a kiss given to someone who needed it most before they went to their own personal great battle. We can argue to the readers that this is "good." We can typically win this battle. Now let's raise the stakes a little. What if that great battle is actually a great battle against the government. Maybe this little act had larger implications. If it was a close battle, maybe that kiss actually turned the tides and made the battle a victory. I say "maybe." The likelihood is small, but non-zero. And we already knew the act was good because we valued the kiss earlier. So maybe we can give this likelihood some credit.
Maybe this battle doesn't turn the tide of the dystopia. Or maybe it does. If the reader can envision that maybe (just maybe), the outcome of this battle brings the world closer to that point where an author could declare the existence of the dystopa's weak point and allow a hero to strike at it. The likelihood would be minute, but it wouldn't be zero. It's not zero as long as there is some unknown in the effect.
In the end, the result is that we never prove whether the kiss took down the empire, but we never fully disprove it either. It's left in limbo. Most likely, the kiss didn't take down the empire. Singular events rarely do. However, the kiss did do some good locally, so we can justify it that way.
I find stories which feature actions which are locally "good" and just might have shaped the course of history to be very valuable. Stepping onto my soapbox, I find many of us try too hard to jump straight for shaping history, and don't pause to try to consider what happens if we are wrong. If an action was locally good, then it has more room to be deemed not-bad in the long run. I'll step off my soapbox now, but just think about it.
One last aspect of this is that the characters believe they are not in a dystopia. Their actions should reflect this. It is easy to sell a rebel who breaks everything they see, and just happens to get lucky and catch a glimpse of something worth breaking. But what if this isn't a dystopia? What if it's actually a utopia? If they can act in a way which brings down a dystopia, but does not damage a utopia, then we can truly laud their actions, because we don't have to come to an agreement as to the nature of the society. Agreement his hard, but an action that is good no matter what avoids the need for agreement in the first place.
So yes, I think a dystopia where everyone forgot it was a dystopia could create great fiction. The trick is to make the actors tell a story that will touch people in the way you want. Show them how you would like people to behave if they were ignorant of a dystopia. Tell that story, and it will be a story worth reading.
*I initially had three videos here, like I had videos for the happy children. However, I could not bring myself to put them inline without a warning, and a sufficient warning could not fit into the flow of the paragraph. Sufficed to say, these videos are not examples of the shining message of hope I wish to share, but they prove to be an important part of the story none the less. It's not reasonable to write distopic story as you describe without being full aware of the extents the human body and the human spirit can withstand, and what it looks like just beyond this point as the human spirit is slowly snuffed out by the burdens of life. A distopia that forgets what they are will run up to these limits, and will step beyond them. You will see these things before they get better -- anything less and your distopia was far more desirable of a place than you had intended. You really have to challenge the human spirit to create a brutal dystopia for your characters to live in.