Because of the subjective use of first person point of view, the narrator of this story is an unreliable narrator. Also, this narrator is unreliable because he/she invites the reader to participate in the description of Omelas. And, apparently, from the switch to third person point of view, the narrator is not a resident of Omelas.
From the description of Omelas by the narrator, there is a certain ambivalence that comes through: "How is one to tell about joy? How describe the citizens of Omelas?" The happiness has an air of unreality to it, for it has been fashioned by man, certainly an imperfect work himself. Further, the problem of describing happiness, it seems, is that its antithesis has been eliminated: pain and sorrow, and one can only truly know happiness after having experienced sorrow. Thus, Omelas seems but a fairy tale. And, here is where the narrator most exhibits his unreliability as he suggests the reader him/herself decide about Omelas:
Perhaps it would be best if you imagined it as your own fancy bids, assuming it will rise to the occasion, for certainly I cannot suit you all.
Here, also, is the point at which the concept of empiricism enters as the world and human experience can never be given an entirely objective analysis. For, with the differences in human beings, each mind that observes something will affect the outcome of an empirical approach to truth. Indeed, it is this "pragmatic theory of truth" proposed by William James that is at the heart of LeGuin's narrative.
Because of James's beliefs being "those that prove useful to the believer," the narrator switches later in the story to the third person point of view, and the discussion of Omelas as a utopian society becomes one that the reader and the "believer" must decide. This is why some residents have tears that dry "at the bitter injustice" of the degraded and imbecilic child when they comprehend the "terrible justice of reality" [pragmatism] and they accept it." Others cannot accept such a concept and, therefore, leave Omelas.