Much to the chagrin of the very religious, the Christmas holiday has been a secular holiday for a long time now, at least in the United States. It is the greediest and most commercialized of all our holidays. To rid yourself of any doubt just look at all the people who leave their families Thanksgiving night to camp outside Wal-mart and Best Buy to fight strangers for cheap products. Half of the time these purchases aren't even for gifts but for themselves, ... and the Christmas season has begun. Mind you, I don't have a problem with that until that person claims that atheists are the ones "taking Christ out of Christmas". Don't blame us, ask any of their 6 year olds what Christmas is about, they'll tell you gifts and Santa Claus.
Perhaps the Santa Claus and God myths aren't all that different and perhaps there is a reason for that. Let's look at some similarities.
God Santa
Bearded male figure above you in the sky /// Bearded male figure above you far up north
All seeing and judges your actions /// Knows if you've been bad or good" and judges
Rewards you with heaven punishes with hell /// Rewards you with gifts punishes with coal (fire)
Angels ///Elves
Priests to represent him ///Mall Santas- we tell kids they're Santa's Helpers
One reason Santa is introduced to children is to ingrain the idea of an "unseen watcher", someone that is always watching and judging their actions. It introduces it in a fun way with minimal possibility for punishment. Worst case scenario he brings you nothing but coal, so it's not even a scary downside. Also this never happens, so the children get used to the idea of only receiving the reward. Think about it, how many christians do you know that think they are going to hell. So by the time Sunday school starts they have already accepted this as a reasonable concept. But this new lesson is repeated every week instead of just several weeks each year. Maybe there isn't as much separation between the religion and Santa after all.
The connection between Santa and religion isn't my reason for reconsidering whether or not it is a good idea, it's a matter of truth. As a child you are repeatedly told how important it is to be honest and not tell a lie. You are also taught that you can trust your family. I admittedly was one of those children that felt they had been lied to when I figured it out. I was surprised that this big lie had been told to me by my entire family. I was reminded of this while listening to an episode of This American Life (minutes 6:15-27:15) about a family who has a very elaborate Christmas tradition that included hiring people to play Santa-like characters as part of the ruse. It is definitely a lie, we even talk about finally telling them the truth, but is it a harmful lie? Certainly most people agree that there are some times where it is acceptable to tell a lie. Usually it is when the harm of telling the truth would be greater than the harm of the lie. I don't know that the Santa story meets this requirement.
The Santa issue can also be a bit of a class warfare issue. Kids from poor families who may only receive 1 item from the Toys for Tots may wonder why Santa only gives them one gift while a classmate gets videos games, iPads, and phones. I imagine families that have monetary issues have ways of limiting expectations for those children.
So, should atheists abandon Santa Claus in favor of truth? I don't know. Watching the kids open gifts at Christmas time is fun, but I think their excitement may just be the gifts. On the other hand maybe the buildup of waiting for the big day is why the kids get so excited. I'm not sure if it's just a harmless tradition that doesn't matter or if it's an unnecessary lie at a time when you're trying to teach your kids the importance of honesty. Let me know how you feel about it, or if you have any other arguments for or against the use of Santa.
p.s. I would highly recommend listening to the This American Life episode, it's very interesting. I couldn't get just that section to link but the main story I would like you to hear is from 6:15 to 27:15