Heh, there really is no right or wrong answer to this (well, there is, but there's only one guy in the world who knows and he won't tell us).
Since there are sequels and the one game following this one pretty much says it's just a curse LeChuck put on Guybrush, you could argue that way. But, every game following this game (Monkey Island 2) was made without the original creator, Ron Gilbert, who had the story for the third game planned out but left LucasArts before it was made. As such, it depends on whether you accept the third (and the other) games as canon or not.
The later games certainly stepped away from the whole "It was all a dream" aspect, but then it's argued that they weren't following the story that the first two games set up and instead went ahead with their own story. It's up to you really.