I think people start with the premise that consciousness is a specific “thing”, that it is unique and special to humans (and maybe dogs because we like them but definitely not spiders and flies because we don’t) and then try to work backwards to define it in some ways that keeps it special. I don’t think consciousness is so specific, and I think people aren’t clear about how they think about it as something separate…
The entities one encounters in a dream each night certainly seem real at the time, yet that illusion is shattered each morning. All the "real" reality holds to it, is that it's a timeframe that I perceive to be much longer. Why am to I believe that after my ~80 years expire I won't simply awake yet again from a sleep I did not know I was in?
This is where the oft misinterpreted quote of cogito ergo sum, I think therefore I am, comes from. He was not arguing that if something is thinking, then it is conscious, but rather that the only thing one can be sure of is of their own thoughts and thus their own existence.