There's a fan theory that states that the events in the show are just normal events as seen from a dog's perspective. Some specifics of the theory include:
Courage actually lives on a regular farm. He just thinks it's in "the middle of nowhere" because his owners are too old to walk him and he doesn't know what's outside.
The "monsters" in the show are just normal people or objects that Courage imagines as something completely different. That would explain why Eustace and Muriel rarely seem to notice any of them. Courage is actually freaking out over a postman, or a vacuum cleaner.
One of the Cartoon Network Groovies, "Courage: Hearts of Love" uses the concept of this theory by having Courage freak out at mundane things during a gathering at the Bagges' house, though it was created several years before the idea became mainstream. Nothing particularly scary is happening but Courage still is freaked out by everything. It also shows Eustace as a less jerkish owner, which implies that most of his cruelty is exaggerated by Courage and that he is probably more distant and forceful to Courage compared to Muriel's constant kindness to him, which causes him to see her as an angel.
Is Eustace a Jerkass Woobie with a Freudian Excuse or a totally unsympathetic jerk? For that matter, was he a nicer person when he and Muriel first met who became cantankerous with age? They do have their genuine moments of affection, after all. It's possible he hates Courage because he's jealous of his close relationship with Muriel.
Eustace's brother Horst is depicted in the show as a mean Big Brother Bully, but it is possible to interpret his actions toward his brother as harsh but protective.
Horst may have been a jerk about it when he refused to let Eustace come with him on his hunting trips in "Farmer Hunter, Farmer Hunted", but it's conceivable that Horst refused to bring Eustace along because he didn't want him to get hurt.
Fred from "Freaky Fred" is often interpreted as a child molester, with his shaving obsession being a stand-in for sexual abuse and Courage representing a young child.
by having Courage freak out at mundane things during a gathering at the Bagges' house, though it was created several years before the idea became mainstream. Nothing particularly scary is happening but Courage still is freaked out by everything. It also shows Eustace as a less jerkish owner, which implies that most of his cruelty is exaggerated by Courage and that he is probably more distant and forceful to Courage compared to Muriel's constant kindness to him, which causes him to see her as an angel.