Why discount good ideas just because they came to you in sleep. The problem you mention results more from failing to edit. Or to cull. Different topic altogether.

Conscious songwriting can fall into ruts--one of the reasons there is so much dreck. Dreaming is a form of lateral thinking, where we jump the rails and make different associations that nevertheless can be appropriate and logical. That's the heart of creativity. Of course, there are other ways to achieve this--many techniques can be applied formally, though people seldom do. Dreams are a freebie where this rail-jumping happens naturally, and everyone has five or six of them a night, the most vivid being just before waking (unless an alarm wakes you at some different stage of sleep).

We tend to think of dreams as being bizarre and fantastic, hence useless; yet, the surprising thing about them is the degree to which they conform to waking reality. And they reveal a lot of insight on what's happening in our lives. Since that tends to be a focal point for songwriters, why ignore a goldmine?