Translation:We used to dream of winning a game against this team.
"We dreamed of winning a game against this team" should be accepted (it's not) because in English that can take on the imperfect sense: "When we were young we dreamed of winning..." means exactly the same as "... we used to dream of winning..." The "used to" is understood. Putting it in is clumsier.
It does not matter whether it reverse translates, it is still a correct translation and should therefore be accepted, just as "We would dream …" is accepted.
Duo's preferred translation needs to reverse translate but other accepted translations should not (and in general, do not) need to do so.
I don't think that's true. It's the EN→FR exercises which exercise that part of your brain.
Even if it were true, it is no reason to reject a correct response, nor to confuse users with the inconsistency of accepting it in some exercises and not in others.
In any case "used to" is not a more direct translation, it is an artifice.