These are really interesting ideas and I've mulled the idea of whether to perpetrate the Santa myth. When my kids were little we told them Santa was not real. If I had to do it all over again, I would let them believe in the fantasy. We can explore the Scripture on this and invariably we end up with discussing whether a lie is right or wrong. I don't think that's the issue at all. Children develop their imagination through fantasy. Without make-believe and fantasy fun, they grow up being logical, anaytical and somewhat boring. If that's what you want your children to be, then ok. I prefer seeing imagination fully developed because invention, innovation and creative thinking require imagination.