I don't this is necessarily a good measure of how happy people actually are. However, it is a good measure of how people are going to perceive the mood of society.
In other words, if most of what an average twitter user sees on given day is people wishing each other merry Christmas/happy valentines day/etc. then they're going to perceive that things are mostly going OK for people.
In other words, if most of what an average twitter user sees on given day is people wishing each other merry Christmas/happy valentines day/etc. then they're going to perceive that things are mostly going OK for people.