I’d say yes, of course.
Look life is tough, OK to varying degrees but no matter what it is we all have problems in life.
Kids need to learn to deal with it.
You tell children stories like Santa because it develops their imagination. A faith in God teachest them to believe even when physical evidence says there isn’t any.
A child is told of Santa, he believes, it’s FUN. Then slowly he questions things, like “How can Santa be at Macy’s and Gimballs at the same time”
What your doing is your teaching a child not to accept everything at face value.
And slowly they know that Santa isn’t real, yet they aren’t disappointed and devistated. Why? Because it’s FUN. It’s like going to a haunted house, or watching a scary movie. You know darn well that those things are fake and never happend, yet it’s much more fun if you sit back and allow yourself to believe.
Every watch a movie with someone saying, “That’s fake, man that is so fake.” I feel like saying, “Yeah I know it’s fake, that’s why it’s a MOVIE, and even if it looked totally real, you know what? It’d still BE FAKE.” If you are hell bent on not enjoying the movie, why dont you just go? 
We have now raised two generations of people that can’t seem to cope with anything, living form one self-induced crisis to another.
I’m not religious, but a religious background helps kids to learn faith.
When times get tough for junior he needs to be able to close his eyes and reach back into his mind and find his strength and coping skills. He needs to be able to push on even though reality tells him there is no point to it.
We also need to learn the idea of proportionality. A child isn’t gonna HATE you because you lied to him about Santa. This is where he learns, that even lies have proportion. Snitching on a kid for taking the last piece of cake is a heck of a lot different from ratting out a guy who murdered someone.
If you live in reality your spirit is going to get crushed. The real world is tough. You need to learn how to have imagination to cope.
We all have a limited time here on Earth and you must learn and teach your kids to best make use of it. Yes there are times to live in the real world and times to get out of it temporarily.