Lies in the movie are broadly defined not only as falsehoods and untruths, but also as unverifiable statements. In such a society everybody is absolutely straightforward and factual, hence there's no creativity in the fictional, speculative or untestable sense of it. The result is a society that can be described in the best case as boring and in the worst case as frightening.
Interestingly, it becomes clear that a completely and pathologically truthful society is unfeasible for two reasons: (1) life would be psychologically unbearable, and (2) it would give a huge economic advantage to anyone able to lie, or, as economists say, lying would be a dominant strategy in too many situations, providing an incredible amount of power to the liar. After watching the movie, it became quite easy to understand why the ability to lie is an essential human trait.
In any case, game theory and economics put aside, the movie is incredibly funny, so don't miss this opportunity to laugh your head off.
PS: here's Cowen making similar points.