Well you said it all - as to what kids can understand - and why so many parents tell their lies, big or little, and mostly in the belief that they are protecting them. Do you really want small children to know the facts of life as to procreation and for them to experiment? The point about Santa Claus is that it is mostly just fun and most kids do realise at some stage where the presents come from. I doubt so many feel that cheated.You don't lie to your kids unless you have to. Sure sometimes you can't always tell the whole truth after all kids aren't as mature as adults. But in those circumstances you tell the kid what you can and what they can understand. You dont lie to them. And you dont have to lie about Santa. For one that's a really big lie. It involves the kids worldview.
One might make the same argument - always telling the truth - so as to never mention fairies, luck, and so many other things that help in some ways and not in others. Just think of all the traditions that you could banish to the rubbish bin of history if we were all literally truthful all the time. It might start with God for so many and going all the way down to things like 'bad luck to .. whatever'. Would we better off for such or not?