"As for small kids, perhaps you have a point and some fantasize about Santa being right up there with Jesus and the Holy Ghost, but in the long run isn't that a matter for parents to straighten out?"
Yes, indeed, and it is not something that people should have to teach in a public school as a truth.
The teacher didn't have to present "The Night Before Christmas" as factual truth, but merely a beloved holiday poem. Teaching how America celebrates Christmas doesn't have to be a line drawn in the sand and the teacher behind a defensive bunker. If the teacher discussed Kwanza, would she give the complete history and criminal record of the man who started it? In the matter of truth, of course. And let's say her class contained a number of small black children.