Faith is not separate from reality but is what the mind has accepted as true and placed its trust in. Often faith in someone or something will be vindicated. Sometimes faith or belief will prove to have been misguided.
The mind is capable of playing tricks on itself in order to achieve emotional comfort. Often just having a faith in something brings comfort and security in the present, so it serves a real purpose even if the object of the faith does not actually exist. The tragedy occurs when faith constantly takes precedent over reason and results in a wasted and unfulfilled life. Jehovah's Witnesses are an example of this.
Provide faith is used in moderation I think it has its uses, alongside alcohol, movies, novels and other forms of escapism that help to soften the harsh realities of life.