I'm the happy middle type of gal. I couldn't stand the thought of lying to my so-precious babies for exactly the same reason as you. While I understand that parents inevitably lie to their children I didn't see the need for it to be such a big one (about what is a very real relationship to some children, so then the discovery of the lie much like them experiencing a death of sorts). I get that all kids don't have that same emotional break up, but some do and I didn't want to risk it.
That said, Christmas doesn't have to be without santa, and it certainly doesn't have to be thought of as sad or lacking just because you don't work so hard to lie your butt off at every turn leading up to the day. When my daughter was old enough to pick up that santa was everywhere, I read her the story and explained it to her as a lovely story that we take much joy out of. She's as excited about santa as the next kid, she just doesn't happen to believe that he'll come sneaking into the house with her gifts.
She's very well aware that we get her presents, and I even came up with a tradition that we all so very much love now... every year at a certain time (generally when we put up the tree, although I've been shopping long before that) Daddy pulls up a chair and my daughter climbs into his lap in her pajamas. Sometimes she's written a list or letter, sometimes not. He snuggles her and talks to her about how good she's been this year, and asks what she'd like for Christmas.
Every year she's a little older and naturally wants to be more involved with selecting and wrapping gifts. She was like that even at age four, so we'd all have missed out on that experience if we were hiding behind santa. It is delightful for all of us for her to participate and put presents slowly under the tree as the time approaches - and even more delightful to surprise her with extra gifts on Christmas morning.
All from us, the people who love her.
She'll never miss santa b/c she's had him in her life in a different context. She'll also never lose him b/c we never have to change the context of that relationship. He's a great story, and great fun. We also have other traditions we love - such as making cookies together and giving them out to people we love or who need cheer, making up cinnamon rolls to rise and be eaten on Christmas, reading the Christmas Story out of the Bible with the house lit by candles on Christmas Eve while sipping hot cocoa in the new pajamas bought and unwrapped as the 'one gift before Christmas'.... it goes on and on.
Christmas is magical if you make it that way. Santa or no, it is a miraculous and joyful time all the way around.