It is in fact exactly that that is valuable. Beginning to see your parents as flawed human beings instead of godlike protectors is integral to healthy development. So is recognizing that being a grown-up does not mean discarding your sense of fantasy and whimsey. The Santa myth allows for both.
It teaches distrust. You can call this practical and pragmatic and all that; I won't disagree with that. Parents are indeed human and make mistakes. Children, however, can learn that through real mistakes their parents make, not fabrications.
Teaching distrust is something I'm quite morally against. It's practical to be defensive and assume other people are trying to manipulate you or might let you down, but at the same time it causes... distance. This is especially bad between
family members, the people you should probably be closest to, but really applies to all your relationships.
As for fiction, I don't know how much you remember of your childhood, but fiction and reality are inherently blurred to a child, because they do not yet truly grasp much of reality. To a seven year old, you can really get to a giant's castle with magic beans; and there are mermaids under the seas while witches live in candy houses in the woods. Even if you teach a child that babies come from sex and thunder is superheated air from an electrical arc, they are likely to prefer to believe in the stork and the bowling angels anyway, because those are more accessible, more wonderful concepts to a child.
I know there's a stage in development where fiction isn't understood as a concept. I honestly don't remember that point in my childhood; my earliest memories include playing with toys and making up stories for them. I built entire worlds out of lego, and lost myself in them. I never thought I was
really making worlds or that those action figures were real people. Imaginary friends were always imaginary. Suspension of disbelief is something I picked up early, and I don't think I was particularly atypical in that.
There's nothing wrong with a child wanting to believe more mystical explanations, like storks or whatever, provided it's a choice they actually make. I just don't think parents should present these mystical explanations as factual. There's plenty of room for mysticism, wonder, and all that without lying.