Nonfiction is adept at discussing external realities in ways that make us think and know.
On the other hand it does not capture the nebulous internal realities that mystify us. It does not answer the questions we are most emotionally attached to. These are the questions about the meaning of life, what happens to the core of who we are when we die, why does love end, how are we supposed to carry on in life in the face of the fact that someday we and everyone we love will die.
Fiction allows for targeted discussion of the human condition. Metaphor and analogy are powerful ways to examine feelings, and human difficulties that are less starkly defined in real life. The ability to explore the human condition through literature enables us to have public discussion about issues that are often very difficult to articulate.
When we read a story (or a statement in a story) that resonates with our innermost hopes or fears or questions, then we feel less alone and less lost.
Because fictional literature does not present itself as truth, it can supply the benefits of religion without making any false promises.
Without fiction, we would have no way of developing imagination, which, without a doubt, is needed for the arts, be it drawing, painting or sculpture. Without it, we would have very little, or no philosophical conversations, or even philosophers who make us think. Nor would we have thought-provoking literature, for they are considered fictional.
In society fiction is important because it inspires imagination. I read many Fantasy books, and now my main goal is to write an awesome one. Fictional writing is also healthy, it is very often funny, which helps with depression. Reading fiction is good in schools, because it's fun, and teachers love that. If children only read non-fiction, they'd become extremely bored, and this is coming from a guy who has read 24 different dinosaur encyclopedias. I love fiction and non-fiction and recognize the severe importance in both.