The biggest practical downside I can think of is if in checking references, your former boss gets called and has a reaction of, "John Doe, Senior Foobar? I don't think we even had a Foobar". So might be worth running it by whoever it is from the company you'd be likely to put down as a reference. I've met founders who are perfectly fine vouching for any reasonable title the employee wants to pick, though.
It's obviously wrong to take the CEO title if you weren't the CEO (he or she might take it personally) or CFO if your job had nothing to do with finance, but I think a certain amount of leniency is allowed.