Hey Fairyglo ... you go your way, and I'll go mine.
There is a difference between playful fantasising, suspending disbelief in role play, and lying to keep control of your child. I'm happy to hunt fairies in the woods or to do the tooth fairy bit, but if they ask me directly if there is a tooth fairy, I won't lie.
I'm not 'over congratulating' myself as you so rudely put it. I simply feel that lying to children is abusing a position of trust. It would be like lying to a foreigner because they don't quite know the language and you know you'll get away with it for your own means. At worst it's an abuse of power and at best it's lazy parenting which stores up problems for later.
Also IME those who use the word 'smug' to describe others tend to have insecurities surrounding the issue in question. Otherwise, why not have the confidence of your own convictions if you're so sure there's no problem whatsoever with telling your kids lies to make a smoother ride for yourself.
My dh lies and 'jokes' with the kids. They come to me now and say, 'Dad says .... Is it true?' because they knowhe can't be trusted and I can. Sometimes it is true and sometimes it isn't, but they now feel the need to check it with me.
I don't delude myself into thinking I'm always right or that they think I'm always right. But they know I wouldn't lie to them and for me that's crucially important.
Mine clearly isn't a popular view but I feel strongly about it so I won't creep around avoiding the issue no matter how often I'm accused of being smug.