Dark Lady and Youth are Fictional?
In my opinion, and it is only an opinion, both the Youth and the Dark Lady of William Shakespeare’s sonnets are fictional. I think Shakespeare created them simply for the purpose of addressing his sonnets to them. It is possible that specific people he knew got him started on the train of thought that led him to the sonnets, but I don’t think they are specifically addressed to the actual persons. The mind of a playwright is definitely able to write fictional poetry for his private friends to read, and possibly just to mock sonnets of his time.
In 1593 Shakespeare published his “Venus and Adonis.” It contained a dedication to Henry Wriothesley, the Earl of Southampton. In 1594 he published his “Rape of Lucrece,” also dedicated to Southampton. These are the only two works that Shakespeare had published himself. The two dedications to Southampton are interesting. The first sounds very much like an outsider trying to enter the Earl’s circle of friends. The second sounds like an insider who knows he is already a friend. Therefore, it is reasonable to believe that Shakespeare entered Southampton’s circle of friends (Perhaps as a resident poet?) during the time that separated the two poems. Many believe that Southampton is the Youth. It is reasonable, but there is no hard evidence. Thomas Thrope published the sonnets in 1609, long after they were written. He wrote the dedication:

TO * THE * ONLIE * BEGETTER * OF
THESE * INSUING * SONNETS *
MR. W. H. ALL * HAPPINESSE *
AND * THAT * ETERNITIE *
PROMISED *

If Mr. W.H. is the youth, and the youth is Southampton, then the simple reversal of the initials brings us to the conclusion that Thrope’s dedication is to him also. But why the reversal of initials, and why Mr. And not Lord? It is thought that the sonnets were written to be passed around among Southampton’s friends and not to be read by a specific person.
The sonnets may have been written strictly for entertainment, or possibly to mock the common sonnet. The Dark Lady is contrary to most sonnets of the time. He did not speak of how beautiful she was. In Sonnet CXXX, Shakespeare seems to be mocking typical sonnets.
“My mistess’ eyes are nothing like the sun;
Coral is far more red than her lips’ red...”

Serious topics are also addressed in the sonnets. Sonnet XXXI for example is about absence, death, and lost loves. Again, these are not common sonnet topics. The majority of the sonnets were addressed to the Youth. The reason for that may have been the simple fact that it is so contrary to usual sonnets.
I think that it is a mistake to say that the Youth and the Dark Lady never existed. They certainly existed in Shakespeare’s imagination. In my opinion, Shakespeare drew them from life, or, better, many lives. Many authors build characters from people they know. They take a bit here, a bit there, and build the character they want. Shakespeare did it in his plays, why not in his sonnets? Is Hamlet any more real because Shakespeare created his character from people he knew? Why should we assume that the sonnets have to be written to a real Youth or Lady just because they seem so real? It is not right to think that the same mind that generates thoughts and ideas for many unique plays is not capable of writing fictional poetry.
Of course this is only my opinion, the subject is, and probably always will be an unresolvable debate. However, I don’t believe that the sonnets were understood as evidence of specific love to any specific persons by the “private friends” among whom they were circulated. The youth and Dark Lady existed in the mind of Shakespeare and that’s enough. Perhaps that is why identification is still open. The sonnets are valuable on their own. They don’t have to be true to be true.