I for one find the dreams completely unnecessary mostly because at this point and time Shepard have already seen a lot bad things suddenly he/she loses it, have bad dreams and becomes sad? He/she is a soldier and even he/she says people die in war it shouldn't have that much of an impact on him/her.
So I have somewhat hard time seeing Shepard become all "People are dying and it's getting to me" for crying out loud it's war, not a trip down to the mall.
People die in war all the time yes, but how often do you watch your planet fall in less then a day and watch civilians young and old plus soldiers vaporized trying to evacuated the planet? Most people have never been in a real war and if they have they would probably know that just because people die all the time during war doesn't make it any less traumatic watching helpless people being slaughtered. Plus I still belive it does give you a little wiggle room anyways. I mean most people complain about how these dreams wouldn't affect shep but there is even an option to just say it's nothing and pretend like it's not happening. so I don't think there is honestly a problem with RP ability there.
I feel to many people think they need control over every aspect of shep, but when you think about it can you control what you dream about? What gives you nightmares? Or are they just something that happens and you either wake up and move on or sit around and wonder what they mean.
That's the control you have in this game, you define each shep with how you have them react with what you are givin. Hell, there have been many time throughout the trilogy where I couldn't say exactly what I myself was thinking, is that bad? I don't think so, I just choose which of the diolouge I was given that fits closest to my current sheps ideals. And honestly I can barley remember most of the dreams I have. I think people assume they should be able to define every aspect of each of there individual sheps in game or it's railroading or whatever, but that's not always how RPGs work. Sometime you gotta use your imagination and just kinda go with the flow.