Er... yes? Like... after you've described the festivals in Omelas, the wealth and the parties and the fun and the singing and of course the sex, none of that can really be real unless there's a child at the center living in filth and misery?
In worlds entirely without magic, the role of Valmallos or the Omelas-child is played by such nonmagical forces as the Jones Act, to make shipping goods between different ports of your own country wantonly expensive. Or if housing is becoming too cheap, by passing regulations making it much harder to build houses, until people are again living in squalor and misery. Or by medical guilds passing bylaws that restrict the number of residencies and doctors, so not everyone can get medical care, if people were getting too healthy before then.
But in the economagical universe of Creation, where people can just cast spells without needing a whole economy behind them to enable their feats, laws would not be enough to prevent people from being happy and rich, if they could just cast spells for that.
Valmallos makes sure that doesn't happen.