I learned in negotiation theory that one must always have other offers, in order for companies to value the person more and extend the most competitive offers that they possibly can.
Actually - it's more important that you have options so that you are negotiating from a strong position. If you don't have a plan B, then you are going to have a lower personal bar of acceptance in negotiations.
But, is such action unethical? Should I interview and obtain offers from companies that I do not truly have any plans to work for? Or, is it just simply "being smart about it", and that it is really a necessary strategy when job searching?
This is not really smart:
If you have a better offer from company B, why bother negotiating with company A - you have the better offer already.
If you plan on playing A and B off of each other, this will likely backfire after the first or second time you raise the stakes on either company and they decide to go with someone less demanding.
The best strategy is to know your value and simply state that - don't refer to "other offers".