DF is meant to be a psuedo-realistic (fantasy) game, though. Amnesia is the stuff of bad fiction whose only purpose is setting up sitcom misunderstandings and In Medias Res for bad action movies or games. (And occasionally for use in some decent mystery things.)
Besides, real amnesia works more like in the movie Memento than just having your memories of your life up until that point suddenly go through a powerful magnet, and having your brain get a zeroed drive. People with real amnesia either don't remember anything, and keep not remembering anything outside of shorterm memory for the rest of their lives (they can't "read" their memory), or else they remember everything before they got amnesia, but nothing after, the total opposite of fiction amnesia (they can't "write" to their memory).
Actually, retrograde amnesia does exist, and it's just as common as anterograde amnesia.
Wikipedia is your friend! A particularry nasty caseI would assume it's a lot more accesible for people to understand retrograde amnesia because we've all had a spell of memory loss once in our lives.
Unless you are complaining about laser-guided amnesia. Of which I agree it shouldn't be in the game because regular retrograde amnesia seems like a good cause for 'FUN'.
Urist Macvictim was once a potash maker. But then, one day, a troll knocked him accross the dining room. After that, nothing was the same. He didn't know anything about potash anymore... And who is that woman who is sleeping in his bed at night? And what happend to his son? Since when did he become a grandfather?! Even with so many questions to fill, he just decided picked up a bucket one day and go back to his job.
Anterograde amnesia however seems like it would definitely be a pain.
I mean, unless the dwarf in question was a legendary at something and his skills haven't been affected by the cause in question, you would end up with a dwarf that wouldn't be able to advance in any/some aspects. And if that just so happens to be skills, I'm afraid that many a player will consider Urist as having died the moment the amnesia was occuring.