It's not the place of the DM to decide that an encounter, whether social or otherwise, should or should not happen. Seeking or avoiding social encounters is a decision to be made by the players and their characters. It's not the place of the DM to decide that something is or is not a challenge; that's a matter of perception, whether or not any given player sees it that way, and again it is irrelevant. The only thing the DM needs to worry about is describing the environment, how to play their NPCs, and how to adjudicate the resolution of uncertain actions.
If that works for you go for it. Doesn't really sound fun or interesting to me, but that's just me.
I tend to prefer a more dynamic, involved DM'ing style than "Neutral Observer who occasionally rolls dice for the NPC's."
Edit: Actually - I have a question for you. Do you mainly run pre-written modules, or do you create your own dungeons and storylines for your games?
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