Well I was being a bit facetious, and I didn't come up with that quote. The underlying point is that all stories are intentional untruths, so you can make a case that they are technically lies, if of a benign and cooperative nature. On the other hand, maybe those lies reveal deeper truths - "there's a world of difference between truth and facts" (Maya Angelou).
See, that's the problem. They are not
intentional untruths. That is the exact problem. They are intentional, yes. And they do not have
literal, physical truth. That does not, therefore, mean they are
intentional untruths. That would require, as I have said, the intent to deceive.
A story, in general, does not--and in particular a collaborative story can't do that to the people collaborating on it. No one plays D&D thinking it is literally, physically true, which is why the Chick Tracts about D&D are so hilarious. You do agree with this, right? That no one who plays D&D goes into it thinking, "I am LITERALLY, PHYSICALLY Black Leaf the Thief, and
if Black Leaf dies, I AM ALSO DEAD."
So, when telling a story, we aren't talking about things that bear literal truth-value. That's perfectly fine; we talk about plenty of things with no
literal truth value that have some other form of truth-value. Counter-factual claims, for example, can be true without being literal: "if it rains Monday morning, I will bring my umbrella" remains true even if it happens to be the case that on Monday, it doesn't rain--because it represents intent, regardless of whether that intent bears out. Or a mathematical statement can be abstractly true, such as the four-color theorem (TL;DR: simple maps, with no oceans/lakes/etc. and smooth borders, never require more than 4 colors to make sure all regions have different colors if they're connected by edges.) That's a truth that doesn't actually require there to be any such maps, or indeed any maps at all.
Stories, on the other hand, tend to be held to (at least) one of three standards. Either they need to be metaphorically true (representing something, whether it be a physcial thing e.g. a satire of real political persons or an abstract thing like a moral lesson), or they need to be subjectively true (depicting the
experience someone has had, even if the actual
facts that induce it are unreal), or they need to be at least
self-consistently true (depicting something with minimal connection to anything real or abstract, but any "facts" established within the story remain so unless and until a greater understanding reveals that previous "facts" were incomplete or faulty.) A few, like documentaries and textbooks, may be held to the higher standard of literal truth, as they claim to be giving information about real-world events, but these are by far the minority among things people tend to call "stories."
Defining "lie" as "anything which is not literally true" is a poor definition of "lie," which does not comport with the way actual people use the term, creates major confusion regarding things like abstract, normative, or subjective/experiential truths, and is nearly guaranteed to get a ton of pushback. If we instead define "lie," as many dictionaries do, as (some variation of) "presenting a knowing falsehood as though it were literally true," we cut out all of that nonsense--but we also, definitionally, find that fiction becomes a third category. It is neither a lie, nor literally true; it is something else entirely, because it doesn't have
literal truth-value, it is
neither literally true
nor literally false because it doesn't have the
capacity to bear literal truth-value (most of the time; again, documentaries etc.) Much the same can be said of nonsense phrases: e.g., there is no true answer to the question, "Have you stopped beating your wife, yes or no?" if you never beat your wife in the first place (or do not have a wife, etc.) because the question is malformed. Or, "The current King of France is bald," which can be neither true nor false, because there
is no "current King of France" to bear or lack the property of baldness. That doesn't make "the current King of France is bald" a
lie. It makes it
nonsense.
I don't think stories are entirely
nonsense either, because stories almost always serve a purpose--perhaps good, perhaps bad, but some purpose nonetheless. But it would be a significant step up from the utterly incorrect notion that all storytelling is
lies.