No expert exists in a vacuum. McKee's lectures are aimed at a specific audience.
The irony of teaching screenwriting in college is that McKee keeps telling 20-something students that they should write about life when few of them are old enough to have the life experience to understand what "life" even means.
"Life" in this context is not a timeline of events and dates like a CV or bio. He is not talking about the character's childhood, and what he ate for breakfast. "Life" is not just a worldbuilding exercise left to the imagination, or where an author MadLibs tropes and pseudo-Freudian motives, like rolling dice for an RPG character.
"Life" is how real people behave. It's what's important at the end of the day. The kind of person you become when you drop the fantasies of youth and apply yourself to become a better person. "Life" is the bumps and bruises, and healing time, of an adult. "Life" is how your priorities radically change, forever.
When I was a child, I spoke as a child, I understood as a child, I thought as a child; but when I became a man, I put away childish things.
As an adult, you can look back at childhood with different eyes, you know what kids don't know. You can also see your own parents, and the generations that came before, with less mystery, resentment, and awe. As we come into adulthood, we take on responsibilities we rejected when we were immature. We watch our parents age and become frail, and realize life doesn't end at 30 that's actually the age where you start to realize how much of our childhood was just commercial bs, and also watch your friends struggle with the loss of that easy childhood identity where "fun" is the commodity that consumes every moment.
Not everyone matures completely, but everyone experiences this "turn" of identity where candy-colored breakfast cereals and cartoon mascots become just empty jingles and tv commercials. Similarly, the childhood version of "romance" is discarded, and even what is acceptable for dinner changes forever. You easily remember what it was like to eat pizza every day, and all the dumb celebrity crushes you fantasized about, and how important it was that you constantly have "fun" or you will die. Everyone learns this, eventually.
The only people who lack this universal knowledge of "life" are (broadly generalizing) everyone under the age of 30-35. Stories that lack realistic characters are immature, and McKee considers immature writing "bad".
Robert McKee estimates the typical screenwriter begins in earnest at around age 20, and needs 10-15 years of bad writing and living life before they have both the writing skill and the life experience to write something good. Therefore his magic age is 35, but obviously these are sweeping generalizations and round numbers.
I am simplifying, but all of this is said in this video interview. (Also you can probably guess which side of 35 I am on.)
Your taste in authors will change as you mature and figure out "life"
Philip K Dick was an imaginative and entertaining author with mental health problems that prevented him living a normal life ("life" in the McKee sense of the word). He had psychotic episodes which he called religious visions, he was paranoid and depressed, and he wrote some "crazy" stuff that was not so great including a mean-spirited anti-woman screed where his (self) hero befuddles an abortion clinic with algebra (because people with vaginas are too stupid to math). He also nagged the FBI that fellow sci-fi author Stanislaw Lem was actually a cabal of communist spies intending to infiltrate America.
Dick will be remembered as a genius more than he will be remembered as a crackpot, but as I mature my opinion of his writing has been tempered. I enjoy his wacky plot twists and reality-melting diversions, but I also now see a man who couldn't finish the stories he started, and every protagonist has a self-justified persecution complex because the world is nothing but conspiracies.
HP Lovecraft is another author that I enjoy for my own nostalgia of youth, rather than reading today. I can't get past the ridiculous racism and the pseudo-victimization of "existing" in a world with something you don't like driving you insane. I mean, really? That's the plot of every story? A thing exists that doesn't even care about you, and you can't understand it so you go insane. Also everyone who isn't of pure-European birth is a devil-worshiping cannibal. I'm embarrassed that I once loved this stuff – how did I not see it for what it was?
These men, whose stories spurred my youthful imagination, now seem damaged and immature. They might have been good at spinning tales of imagination, but they were miserable at this thing called "life", and it shows in their writing. Characters appear just to befriend or menace the hero, but come and go conveniently. There are no 3-dimensional people in their stories. It's all gimmicks and plot. One protagonist is interchangeable with all the others.
So what is this "life" in McKee's characters?
What I never could have imagined when I was younger, was that I would start loving authors like Jane Austen who wrote amusing little romance stories from a bygone era about silly heroines who eventually get married. What I didn't understand because I didn't have the experience was that Jane Austen is so good at "life" that she nails every character, and makes you believe in their motives. They are fallable, and ridiculous because these petty motives are so important to them. There are characters in her novels that are actually aware how silly her plots are, and deflate the heroines' immature fantasy view of the world. All of her stories shift between satire and sincerity. She makes you laugh, and lures you into getting involved in these character's lives, because even though it's just a predictable romance there is a lot of "life" going on that raises the stakes and makes the characters still relatable two centuries later. "Life" is universal.
No one at any time stops to tell the hero of a Dick or Lovecraft story that maybe they are just being ridiculous and should be on medication, but that is exactly what happened to them in real life. Real "Life", that thing they were so bad at depicting.
Austen's plots are no less of a fantasy than Lovecraft or Dick, but every character is a person and has a "life", even if they are a throwaway random townfolk or a distant cousin. She has a "take" on every person's interior monolog and how they view the world. That's something only a mature person recognizes because kids don't have the experience of what "life" is really about or what motivates real people.
Characters don't sprout wings and tentacles, instead they have embarrassing public faux pas, eagerly broken hearts, awful family members, friends who sell out their childhood dreams, false assumptions and inflated egos, and calculating charms and brazen schemes of self-glorification. And it all goes wrong for every single character. Villains and protagonists and all side characters alike, all have something they want, but Austen thwarts them all, every last one – even if it's the most minor detail: Mrs So-and-so didn't enjoy the cake. There is a detail that signals a personality and an opinion. They all have a pre-existing "life story" that is currently being interrupted. That doesn't mean Austen wrote a complete character arc for every throwaway encounter, but it implies every encounter is derived from a real life experience – that's how those little details work. We recognize them. They make these throwaway characters feel substantial.
When we are young and everything must be "fun" and "new", having the imagination to invent seems like the greatest power in the universe – anything and everything will be sacrificed for a new experience. But once we mature and the need to be entertained with a new toy goes away, we start to crave artists who aren't as caught up in writing gimmicks (like sleeping immortal gods that can end the multiverse by sneezing). Instead we start to look for artists/writers who have the talent and insight to write about how the world really is, but also can also make us care about it again.