I think it adds an essential political element to a game; it is rare that a player has to make a value judgment about a particular fact presented in a game: is the teller lying (to themselves and / or the PC), is there a kernel of truth in vague exaggeration, etc.
Also is is incumbent upon the DM to provide information from a questionable source in such a manner that the players can't tell that it is a falsehood ... direct speech probably isn't the best way to do this. "The character thinks you should go west to avoid the ogres," or "under torture, the NPC swears that he doesn't know where the ogres are, but he was going west when you caught him." both allow for the PC's party to end up running into ogres if they go west.