I believe it to an extent until it starts getting you into trouble with the wrong people. Although I don't think being honest 24/7 is always the best for your mental health. Often friends and family ask me to keep a secret and if I were super honest, than I don't think I would feel it right to keep secrets as they are a form of lie. However, I'm half and half. I decide whether the truth is appropriate or not for the situation. So I will say it varies based on the situation. 

I hold honesty to be ones of the most important things.  It's a matter of respect and trust for me. 

I would add to this though, there are ways to be honest and not let somebody think something you don't want them to. I guess you might call this subterfuge?  it's a manner of speaking where you don't give away something or you speak in a way that leaves room for assumptions. these assumptions can be prompted by context or by intonation etc.

 

for example

"do you like my new hair cut?"

 

"oh, it's delightful!! (that I didn't get a haircut like that because it looks horrible) "

 

you keep the rest of the sentence quiet so as not to hurt feelings, but it's not like you're lying or anything.

Honesty as a best policy?  Absolutely.  I make it a point never to lie.  I just don't tell the whole truth.  I've manage to learn avoiding telling the truth without ever lying.  It's something similar to what Jess mentioned.

Honesty by a mile is the best policy. I find it a lot of effort to lie to people, but never use honesty to be cruel to people. "I honestly think you look like drenn" is not something you should ever tell a person unless you're a complete ass.