Propoganda is and always will be a useful tool. If you can keep your forces from being fully aware that they've pretty much lost, they can stick it out for months, even years, under horribly adverse conditions. A dedicated soldier will fight to the death if he thinks it'll further his cause- but nobody short of the clinically insane would fail to throw down their weapons if they were aware that it would make no difference to the eventual outcome whether they fight and die or surrender and live. This is why you never hear any radio reports, during any war, saying "Aww, we're getting our asses kicked. Every battle we've been in, we've lost, and they just took one of our major cities. But that's okay, we're still gonna fight and get killed, even if we do lose!"- the illusion of potential victory can oftentimes be so influential that it spells victory in the end. Look at some of the revolutions in this last century.
Exaggerations, even outright lies are a necessary part of warfare, oftentimes. The dude's BSing mighta been a bit desperate toward the end, but that's exactly what he was doing.
