What is the effect of the author stating that Omelas may or may not be?

In "The Ones Who Walk Away From Omelas," a short story by Ursula Le Guin, the narrator describes in detail a happy city of people who are celebrating a blissful and beautify "Festival of Summer," during which the narrator speaks to the reader directly and is anxious to make sure that we believe that the setting and the people are real.

One the one hand, this narrator is generous with the visual details, describing, for example,...

In "The Ones Who Walk Away From Omelas," a short story by Ursula Le Guin, the narrator describes in detail a happy city of people who are celebrating a blissful and beautify "Festival of Summer," during which the narrator speaks to the reader directly and is anxious to make sure that we believe that the setting and the people are real.

One the one hand, this narrator is generous with the visual details, describing, for example, horses with manes "braided with streamers of silver, gold, and green" and children with faces "amiably sticky" with delicious food. 

But on the other, the narrator also makes vague statements about how the people of Omelas may or may not be. "Perhaps it would be best if you imagined it as your own fancy bids," the narrator invites us. We're asked to decide for ourselves what kind of technology the people have, if any, and whether they have drugs and alcohol.

"Do you believe? Do you accept the festival, the city, the joy? No? Then let me describe one more thing," the narrator goes on to say. Here the story gets hard to stomach as we learn that the whole population of the city gets to enjoy its wealth, its happiness, its science, its peaceful way of life, etc., all because everyone collectively agrees to keep one child imprisoned forever in a dark cellar without ever hearing "a kind word spoken." And of course, the story ends by describing the few citizens who, rather than accepting this cruel trade-off, decide to walk out of the city forever.

The question to consider is why the narrator keeps saying, in essence, "Well, just imagine it however you want. I just want you to know that it's real."

Ten different readers might give you as many different answers to this question. Here's the answer that an instructor is probably looking for: the specifics are left purposefully undetermined so that we can recognize our own society (or any society) in Omelas. 

Let me explain that a little more. Whenever a character goes unnamed in a work of literature, it's a safe bet to say, "The author chose not to name this character because he represents everybody. Who is he? He's everybody." The same goes for places that go unnamed or details that remain vague. The narrator wants us to imagine Omelas the way we want to, because Omelas is every place. Every single society in the world accepts some unjust thing and lets it continue because life is ultimately more comfortable that way. Yet there are always the ones who walk away: the ones who say "No, this is unacceptable."