Why the audience will yell "CHEAT" at the author for doing this.
The main reason audiences usually hate this one boils down to one word: Stakes. In order to be interesting, a story needs to have stakes, something at risk or something that changes. Dream stories are usually the exact opposite of that: Nothing was at stake, and nothing was going to change, and, in effect, the author is yelling "Gotcha!" at the audience.
The "it was a dream" twist is often considered the ultimate Writer Cop Out for this reason. Tricking the audience into thinking something was at stake only to reveal at the very end that it was, narratively, a complete waste of time and doesn't affect the status quo.
A Dream Episode, which is like this trope except the fact that it's a dream isn't a surprise, may also not have stakes (although some Dream Episodes do, especially if they involve sci-fi or the paranormal) but they're usually less hated, because if the viewers know that it's a dream, they're choosing to experience a story without stakes, whereas with All Just a Dream, the audience was essentially tricked into thinking there were stakes when there weren't.
Or Was It a Dream?, which is when the story appears to have been All Just a Dream only for it to be hinted that it may not have been, is a polarising trope — some people think it's a good way of making the story no longer a copout, but others think it's just a half-hearted attempt at avoiding one (especially since it's commonly used by children) or that it's worse than a copout because hinting that it may not have been a dream despite clearly showing the character waking up doesn't usually make sense.
Methods of avoiding the audience shouting "CHEAT"
There are a few reasons to use All Just a Dream plot that won't lead to people shouting "CHEAT" at the author.- Character Development, showing us hidden anxieties, hopes, or other personality traits that drive the dreamer.
- In a serial, the dreamer makes a major decision as the result of the dream, and that has consequences for the rest of the show.
- A setup/justification for a Bizarro Episode.
- A setup/justification for a full episode Out-of-Genre Experience. (Note that this one may work better if it's known going in that it's a dream, but then you have the Dream Episode, which is a separate trope.)
- A Dream Walker / Dream Weaver / Dream Stealer plot.
- The situations are so scary or unpleasant that it's a relief that the situation was a dream. Note that this very much depends on the genre, tone, and general specifics of the work — revealing that Alice's death was just Bob's dream may be acceptable in an episode of a kids' show, but it'd still be seen as a copout in a movie.
- It being a dream is foreshadowed.
Note that setups that explain beforehand that the dream in question is a dream, which is a different trope known as the Dream Episode, also cut down on people yelling, "CHEAT". Also, acknowledging that Real Dreams are Weirder than the other kind helps a lot.
