Whether it was intended or not, the story was presented in a way that the audience is living the horror of the main character with him. The thought that you just replay this dream for potentially ever, while aware of it as being a dream seems like a hell to me. Scariest episode I've seen yet....I am up to this one while working through the series from the beginning.
Dennis Weaver puts in a command performance and I found his portrayal quite convincing. I can imagine being in such a situation would be funny and horrifying all at once and he nailed it.