It is a device allowing for a retcon, so that we can get new movies that aren't constrained by the previous ones. Essentially a reboot allowing access to existing actors and "universe" to the extent that they want to. I definitely don't see that as a bad thing, as otherwise we wouldn't have access to several classic X-characters who are either dead or would have aged out in a continuation of the timeline started in X1. And as icing on the cake, we can get cool period films with this characters.
Is your issue with retcons? Retcons have been happening in comics since the earliest days. Cap's being frozen from WWII was a retcon, as it never happened in the Timely Comics series. DC has been nothing but retcon after retcon since Crisis on Infinite Earths. But even that wasn't the case with Dallas as far as I know. A story that alters the flow of historical events (as was the case with the DOFP comic of course, and the Terminator movies) isn't the same as a story that "was only a dream."