Most restaurants are proud of their wine though not all the restaurants make their own. Some buy it from distillers by the barrel or by large jug, and in some touristy restaurants homemade wine, or hima, as it is called, is not even available and you have to take your chances with the wine list.
There have been many explanations as to why retsina tastes the way it does. The explanation is because they put pine resin in it to make it taste like that and the reason is because they like the taste. Some people have come up with theories on how this all began. When we were kids we heard (from other kids of course) that during world war two the Greeks put the resin into the wine so the Germans would think it was turpentine and not drink it. That was a romantic theory but not a good one. But according to Vassilis Kourtakis, who makes the most popular of the bottled retsina, the ancient Greeks knew that the air was the enemy of wine and used pine resin to seal the tops of the amphora and even added it to the wine itself.
Retsina was the wine of Athens. As far back as the late 1800's Athens had over 6000 tavernas, all filled with wine barrels. The grapes were pressed in the countryside and then brought into the city by horse-drawn carts, before the fermentation had taken place and then taken to the restaurants where the proprietor poured in the resin and decided when the wine was ready. It was not until the 1960's that bottled retsina became available in the countryside and common in the city as many of the old tavernas disappeared and land for cultivating wine near Athens became scarce.
Nowadays retsina from the barrel is hit or miss. But if you go to a taverna and it is full of happy Greek people drinking from glasses that are being refilled over and over again from a carafe then chances are the retsina is pretty good. When it's not, mix it with soda water like I do. This also will enable you to drink all night long. One of the things I have noticed is that I can drink a lot of retsina and still not be hung over the next day. My kidneys may hurt like hell but otherwise I feel great, considering.