You have a funny way of picking and choosing what you believe to be a teacher's responsibility or not when they have children in their charge. I don't have a problem with a teacher going outside the scope of their subject, as long as they have the necessary knowledge to teach the lesson.
If he cannot figure out a way to teach a lesson about mythological creatures without touching Santa, then he needs to take a class in mythological creatures. There are plenty that he could use as an example without going into something that may or may not be a touchy subject for some families. If I can teach 4 year olds about what is real and what is not real without ever mentioning Santa, EB, the tooth fairy or any character they may see in a costume at any theme park around the world; I think he should certainly be able to teach a lesson on this using another example.
I wouldn't have found it a big deal for my child either, but I am not the parent of every child in that class and neither are you. If he had 30 kids in the class, then he had 30 different families with 30 different beliefs and traditions. Sorry, but it is part of his job to respect every one; regardless of how unimportant we or he finds it to be.
Should she go to the principal? Again, I find the answer in how friendly she is with the principal and if she thinks other parents may storm the school over it. Just as a heads up kind of thing, not "do you know what he did? And I am darn mad about it!!" I don't have a relationship with our principal and I would not go to her over this, but I know a few parents that might.