Looking forward to the return of Charlie next week but I'm apprehensive about the writers including Oz in the Supernatural-verse as a part of the fairy realm. Hopefully they have a crackerjack story to tell that justifies its inclusion.
It somewhat fits the idea that belief creates power and substance (ala the various pantheon of gods in the Supernatural universe). Lots of kids believe in such stories, after all.
We've also seen at least one alternate dimension (one in which demons/angels/etc. have no power), so it could also work under that angle.