Well, it would be different if it was explained to kids that it is all pretend. I would have been fine with that one. But, claiming it is real is a lie. A "white" lie perhaps, but a lie none-the-less.
Why? so you aclimate them to disapointment and harsh reality ASAP, destroy their wonder, crush their innocence? They learn Santa is pretend growing up normally, at an age where this is part of growing up? The innocence disappears, but not the wonder of life at the same time. Life will have enough times it kicks you in the teeth as it is, maybe a happy childhood, love, and protecting them as long as possible, will keep them out of bars and jails, when they are 30.
All I can say is, my wife's Motherly instincts in this department Thank God, genrated 2 kids 34 & 28, who know her endearing qualities, that still today include an Easter Basket and something from Santa every year. If thats something bad, I guess you are right.