I work in another museum so I can only speak for us and not the one in question or others, but I doubt it has anything to do with whitewashing history and being politically correct. Probably 80% of our collection, we have no idea who gave it, when they gave it, or the story behind it. Some stuff given before 1971 just vanished. Before the current organization took over at that time the organizations that ran it kept abyssmal records. And you can't just accept a story off the street as the gospel because somebody says it. It needs to be verifiable. There is a Civil War bullet in the collection that the family says was extracted from their grandpa's hip. It's a perfect drop, was never fired let alone extracted from grandpas hip. If we displayed it as the bullet extracted from grandpas hip we'd be raked over the coals by Civil War historians and reenactors for displaying a dropped bullet as extracted. On the other hand we have a pulpit that we knew nothing about, it was "found in collection" as they say. A guy comes in one day wanting to see it and he has the story that his ancestor was a guerrilla during the war. After the war he had 3 crops in a row that failed and an infant son that died, so he interpreted that as a sign from God that he was being punished for his actions during the war and for not living as he should, so he became a preacher. All the details of the story were able to be verified and now the pulpit is interpreted as such.

I'm not saying the story about the dress is true or false, but like Doyle I believe it could have. But without something to verify it, the most they could do is label it as "Supposed dress worn by young lady who was allegedly hanged by Union soldiers after the battle at St Charles."