We'll if you make a story see dream like it can make the audience feel as if they are in a dream.  You would want to make the audience feel that way so you could make them feel the same things or think they are in a dream so they can believe what is happening is really happening  to them. You want to make the reader get into the story and really stick to it so they will read it.  The dreamlike settings is just one of the tools a author can use.