To propose that "everything" is fiction (everything written or told or shown that is) is either semantically empty (this applies to all "everything is X" statements) or wrong. However, I can understand why one might claim it is. Any report by anyone about a cognitive event is going to be distorted, incomplete and/or embellished by the the reporter. And anything admittedly 'opinion' or 'analysis' is inherently 'fictional', even though it may contain elements of 'truth' and map accurately on whatever 'really' was, is or will be.
It's even not quite as clear cut as one would like it when defining fiction by 'intent' (in creation and reception alike). For what about historical novels, which often contain a mixture of fiction and fact? Or 'true crime' novels, who take what was a 'known' event, and add a narrative framework of fiction around what's considered established 'facts' to fill in the gaps? Is the intent in such cases to produce fiction of non-fiction. Or what about books or movies 'based on a true story'? What do you call this kind of hybrid? And what the hell is a 'true story' anyway?
And let's pursue this thought further, for in the above examples we're talking about mixing 'truth' (whatever that may be) with 'confabulation', 'conjecture' and/or maybe just a plain bit of narrative zing. But what 'truth' are we talking about and what kind of truth has the required status to qualify as lending a book the status of being 'non fiction'? Truths about physical events? About the actions of people and their motivations for acting as they did?
Even if we bought into the notion that we can assign a higher 'truth' value to any of these than to, say, that of events described in (plug) Seladiënna—which is, after all set in a world that's pretty much our 'real' world—we'd still, if we're intellectually honest, must ask ourselves, whether there aren't, wrapped in events that have never happened, except in my imagination, 'truths' that are as 'real' as those purportedly being displayed in works that claim to be 'non-fiction'. After all, what is a 'truth', but—and I'm simplifying for the sake of brevity—a statement, expressed in any propositional system of communication, that maps onto some aspect of experiential or empirically testable 'reality'—in what, in my philosophically more pompous moments, of which there are many, I think of as an 'ontological isomorphism'.
Anyway, this whole thing about why some people read fiction while other don't—or don't anymore—isn't as neatly wrapped up as one might want, so that one can use it as a means to pass judgment upon people. The way I think it plays out is that there is a spectrum of reasons, motivations and dispositions here, as per usual when it comes to human beings. Some of the colors in that spectrum we can identify clearly enough, while others may yet be hidden and the rest are blends of the identifiable colors.
For example there's the kinds of people who basically aren't interested in fiction at all. No particular motive here; nothing intellectual or reasoned; fiction just doesn't 'do' it for them. These folks can't relate to written words that describe things which are obviously not real, and the more obviously not-real they are, the less they can relate to it.
This is not necessarily connected with age. I remember having a conversation with a under-20 female shop assistant in a toy store one day when I bought myself a Yoda figurine; during this, with relation to the Star Wars series, she expressed her disconnect from things that "just aren't real". While her disconnect evidently was not motivated by anything even remotely intellectual (the water in that brain was so shallow you couldn't wash your big toe in it), there are others, usually older people of real or at least self-proclaimed intellect, who will rationalize the very same disconnect as something actually desirable or even intellectually advanced.
On the other hand, there are also those who don't even think about why they don't read fiction, but who might still happily watch fictional movies with significant 'non-real' elements or premises. I know several of them, and they are all perfectly nice people of well above average intelligence. That they are also disinterested in anything too deeply 'philosophical' is also true (though they have a tendency toward religiosity, which is supremely ironic, given how utterly fictional that is!); but then again, there are others, who are philosophically inclined, highly intelligent by most standards, but who just wouldn't ever think of wasting their time with reading fiction—and usually avoid fictional movies as well, unless those are labeled as being and an intellectual 'must see'. (Give me a bucket!)
There are many ways, I'm sure, how an older person might get to be that way; human life is too varied and colorful to squeeze everything into a bunch of facile pigeonholes. But I think that maybe the reasons why a young person should already have the disconnect I spoke of earlier, are easier to discern. I think they might be connected with something as simple as not having been read to when little, and later not having had a significant exposure to imaginative tales within the context of 'reading'. Reading fairy tales forces the mind to engage more resources than anything else we have to offer: exercise of the reading capability and all that comes with it, including vocabulary, grammar, style, propositional complexity; exercise of the imagination to support the words in the creation of the world, characters and events being read about; intellect to connect the elements of the story into a coherent, logical whole; emotion to provide deep engagement with the story's characters and their feelings, thoughts, decisions, etc.
I understand the power of movies, and I'm all for telling stories cinematographically, but despite all this, watching a movie—or anything on TV—is a less mentally taxing exercise than reading, simple because it does not require the simultaneous engagement of the same vast range of mental faculties. Said simultaneous engagement—and I'm talking here about that required to support the reading and mental processing of fiction!—is integrative. An early and extensive exposure to the reading of imaginative literature will create connections in the brain that no other activity can create; not movies, not video games, not fantasy cartoons, not even Sesame Street (which once upon a time was an amazing program).
If the sounds like I'm harking back to old times; well, I'm not. It's just that reading about the imaginary happens to be an activity that has developmental benefits that no other activities are able to provide. And continuing to do this is even better, because it ensures that the abilities thus acquired to not atrophy and get battered into submission by 'reality'. Which is exactly what is happening to day; only that said 'reality' has become defined by our cultural brainwashing as something that's not actually conducive to the development and maintenance of healthy human beings.
You could argue that this really isn't any different from the way it used to be, and I suppose that's true enough. But it's also true that we have been fortunate enough to obtain a tool (reading), which is incredibly powerful at shaping us into something more—and complete, if you will—than we are without it; a tool that, when combined with a long, long tradition, ranging across all cultures, of imaginative storytelling, of any kind of deliberately fictional narration, takes us into a realm far above the level of 'animal'; in terms of scope, vision, capability, potential. A synergy whose power is rarely, if ever, thought about. In fact, I haven't seen or heard anyone putting it together in just that way. So, maybe this was even an original thought. Stranger things have happened.
I think I'm kind of coming back to something I said a couple of blogs ago when talking about 'reality sclerosis'. Never mind the rationalizations of those who think they have a rational basis of some sort for their rejection of fiction. Every damn thing can be rationalized; this is a basic axiom of human existence, at least for those humans whose brains have been imprinted with a system of propositional thought, which in turn requires a supporting language.
What lies at the heart of this though is, I think, maybe a loss of heart, and a falling into lockstep with the kind of 'reality' imprinted into us by the current Zeitgeist, especially in the Western world. And in that reality there is less and less space and time for imagination, except the synthetic, sanitized, cultured or pretentiously arty variety considered suitable for human consumption by this age.
I know that it may not look that way, what with all the fantasy movies and books around; but it's a trend that's gathering a momentum, which, I hope, will not end up swamping us completely, leaving only a few desperadoes or anarchists to carry on the flame of the ancient tradition of storytelling and not just getting children to go "Ahhh..." and suspend their disbelief for long enough to become a participant in some Neverending Story.