"He dwells on the past so much, he might as well buy a house on memory lane."
Why do we dwell on the past? First, it's important to make a distinction in prepositions: on versus in. There is a world of difference between people who dwell on the past and people who dwell in it. The former is normal; the latter is often a sign of some greater problem. He who dwells on the past has his mind set in the present or focused on the future, stopping occasionally to re-visit moments from his personal history. But he who dwells in the past is generally so full of regrets and remorse that his focus is, obsessively and sometimes compulsively, on that which he would change but cannot.
Regret is a primary motivation for dwelling on the past. Regret at things we've done or said, or, more commonly, things we haven't done or said. Sometimes we remind ourselves of our crowning victories and greatest accomplishments, like the high school football star reminiscing over his "glory days." Some people remember friends or family, like the lonely college student who misses her ex. Others remember places and events, like the young man who nostalgically flips through the album of his college years. Whatever we dwell on, we do it because we miss those times either because we should have done or said something and didn't, or because those times were "so great" that we'd give anything to have them back.
When you dwell on the past, you relive, however briefly, a moment of such goodness and pleasure, that for that infinitesimal blink of time it seems you're there again, surrounded by the people things that made that time so good. But then it passes. You're left with yourself, your current surroundings, and the aching memory that what's past is past forever. Emptiness, loneliness, and anger are normal responses to such a reversion. So is writing bad poetry, but fortunately this reaction seems to decline as people grow older.
So why do we do it? Why do we spend the present remembering the past? Why do we forsake the future in an effort to re-live days gone by? Reasons vary from person to person, but they can all be traced to one of two roots: either the memory upon which we dwell is very good or very bad; it stands out in some way, a sort of lighthouse in the sea of memory. Nobody spends much time, if any, thinking about the shower they took yesterday, or the laundry they did last week. Ordinary things, tasks done or people seen on a regular basis, aren't fodder for memory; they're forgotten in the rote of routine. It's the special moments, the excruciating or exhilarating moments, that withstand the test of time forgetfulness. It's these extraordinary moments to which our thoughts are drawn, inexplicably or deliberately, on such a regular basis.
Dwelling on the past doesn't necessarily indicate a lack of satisfaction with the present. People who live very happy lives still find themselves, in moments of quiescence and tranquility, drawn to deliberations of days of yore. It's one of the most universal acts of humanity. Just remember: do something each day to make it worth remembering tomorrow.