I searched me crazy for a fairy tale with a red room or curtains in flames, but I didn’t find something like that, but I find a short story from H.G. Wells “The red room” and as we know the producer take also ideas from books.
The description from Wikipedia for the RED ROOM OF H.G. WELLS :
The story centers around an unnamed protagonist who chooses to spend the night in the remote Lorraine Castle. The narrator intends to rest in a room said to be haunted, in an effort to disprove the various legends surrounding it and to follow in the footsteps of the old earl. Despite ominously vague warnings from the three infirm custodians who reside there (“this night of all nights!”), the narrator ascends to the “Red Room” to begin his night’s vigil.
Initially confident, the narrator begins to feel uneasy once in the room, and attempts to conquer his fear by lighting every corner of the room with candles. He then fights a losing battle to keep the candles lit in the drafty room; every time a candle goes out, the narrator’s fear is increased, as he begins to wonder if the drafts are being guided by a malevolent intelligence. Eventually, the narrator’s fear reaches a crescendo, and he is forced to flee from the room in a blind panic.
The caretakers initially feel vindicated when the narrator reveals to them that the room is in fact haunted, and are eager to hear a description of the phantom they assume the narrator has encountered. However, he surprises them by explaining that there is no ghost residing in the room; rather, the room is haunted by fear itself.
So in this story the person is haunted by the fear itself and the only thing he have to fight the fear is a candle.(Prince Charming lit a candle for Henry and Snow White)
Maliciefent use the sleeping curse, but maybe she is not the creator, like the queen. Regina use the curse, but Rumplestiltskin creates it,
There is also a spindle by the sleeping beauty, that would give us a hint to Rumple. If the dreams can conact with our world. The sleeping curse was maybe the first try from Rumple to get to our world, but it didn’t work. Only his mind could reach Baelfire. It wasn’t strong enough to go through.
Regina and Rumplestiltskin refers to Malicefent as a old friend. Was she maybe one of Rumple “Students”? Once she said to Regina that there are limits, that nobody should pass.
Yes, she didn’t know that the creator was Rumple, but why should Rumple tell her. She wouldn’t use the curse, because she had Moral left and Rumple is not for gossip.
With this in mind, I can imagine why Neal Cassidy wanted to keep the dream catcher (I think he is Bea). He was haunted by the dreams himself and wanted them to stop.
And there is another hint that it could be Rumple. He was long ago in a castle that was burning down to get the dagger of the Dark One.
Heros don't get their Happy Ending!