No that's precisely why it wouldn't work. The dreams aren't about no-win scenarios, tactical decisions, sacrifices made in the line of duty or even personal loss. It's about guilt, it's about helplessness, it's about responsibility and fear at a very deep, almost primordial level. It's not about people that *have* died but people that *are* dying right at that moment and are still dying because Shepard can't do anything to stop it.
The boy only says two things: "everyone's dying!" & "you can't help me."
*That* is what's plaguing Shepard's subconscious. Not the words, or the messenger but the basic truth. Everyone is dying and you can't help them. I'm sure I don't have to explain the symbolism of being lost in the woods, whispers of the dead or the ever increasing number of shadowy figures.
You could bring up Schlinder's List, but they had kids that were murdered in the Star Wars prequel as well and in that movie it was just laughable.
Maybe the idea would have been good if human beings were human beings in the universe, but outside of watching NPCs standing around on the Citadel, there's no real connection that the player to these newly introduced characters.
When the game tells you that millions of humans are being harvested by the Reapers everyday and you're off having coffee with Liara at the cafe or shooting beer cans with Garrus, there's already a disconnect. Forcing this new narrative element onto the player in the third game - especially when she has already seen two human colonies (Eden Prime and Horizon) wiped out and basically brushed it off, it just seems awkwardly written at best.
How we react to the story is subjective, of course, but in two of the three origin stories that you can pick, Shepard has had a horrible life. In my version, she survived a bunch of slavers wiping out her friends and family - you'd think that would be more traumatic to her than seeing some random kid wiped out, yes?
But sure, I understand that they're not going to go back and actually flesh out those origin stories. She's not going to have nightmares about her dead family because only a certain number of people will have picked that origin story. They were meant to just give stat boosts to your character in ME1 (Spacer = Paragon, Earthborne = Renegade, Colonist = both), but it's just an example of how they just missed all these small things that they allow the player to choose throughout three games.