It's not flying to me, more like being able to "feel a map projection". But that's certainly close to flying, I guess it's the same category of dream from a "why" standpoint. And once the "i can fly!" part of off the table, I think the "why" is rather obvious: get used to thinking in larger topologies than what we encounter in sedentary day to day life.
However, as you pointed out, generative experience replay runs the risk of learning from counterfactual or impossible experiences. To mitigate this risk, we need a discriminator network, not only to distinguish dream from reality but to judge their plausibility (e.g. flying by flapping wings vs dreaming you took a vacation in Tahiti that you never took vs dreaming about forgetting to do your homework).