The least bad option was to try to explain to the public the slightly complicated truth: they do work, but they're not a bulletproof solution, you still need to do other things to protect yourself such as washing your hands and social distancing, and please don't hoard them since health care professionals need them a lot right now. Instead we were given a simple lie: they don't protect you.
The truth is, I would like a mask, but if my mom has to see a doctor I really really want the doctor to wear a mask that day. And the prior two weeks. And his colleagues.
I don’t believe that lying is ever the least bad option. Truth is good. A good understanding allows people to make rational decisions. But now the population falsely believes that masks don’t help. And if the reason for that is “we were lied to in order to prevent us from buying masks”, then I think that is a terrible reason.
Homemade cloth masks could supplement social distancing and help prevent asymptomatic people from spreading the disease.
Where I live, we have a long way to go to perfectly implement social distancing. Given the severity of the pandemic, anything to help stop the spread should be considered and implemented.
Ultimately we need to change our nature, but that's most likely off topic here.
As masks are produced in massive volume then yes encourage everyone wear one as directed.