I'd like to take a moment to address one of the long-running untruths regarding the Super Mario Bros. series of video games. For almost twenty years now I have listened to people claim that Super Mario Bros. 2's cast of enemies should not appear in any other video game because the events of the game turn out to be a dream that Mario has one night. Basically, the idea is that Shy Guys and Pokeys and Birdos should not exist in the Mushroom Kingdom because they appeared in Mario's dream. I submit to you that those characters are just as "real" as Goombas and Koopa Troopas, and I can prove this quite simply.
I ask you: have you ever had a dream about something or someone that was actually real? Ever dream about a friend or a loved one? Have you seen familiar places and objects in your dreams? Surely those doubting Bowsers out there can see how it's possible for real people and places to appear in dreams, and just because said people or places are in those dreams does not make those people or places non-existent in reality. Shy Guys appeared in Mario's dream because he was familiar with them. Not everything in a dream need be fantastically imaginative. Q.E.D.