I think that much of this is going to be dependent on what constitutes a "hero." In my mind, part of this definition has to be based on embracing a vision of what should be as opposed to what is. Quixote sees the world differently than others and this is what motivates him to bring back a world rooted in idealism and a sense of hope. This is heroic, in my mind. Consider his words about Dulcinea, the subject of his quest:
God knows whether Dulcinea exists on earth or not. I contemplate her in her ideal.
This is powerful in its basic essence. Quixote commits himself into a world of idealism and lives with its consequences. His desire to bring back a world rooted in love and in commitment to ideals is what makes him heroic, in my opinion. Quixote is what he loves. This is what makes him heroic because it represents unity in character. In a world where there is so much division of self, needing to do what one hates or detests, Quixote represents a sense of unification between who he is and in what he believes. This is another element that makes him quite the hero. In the end, it is not the tangible rewards of success that drives him, but rather the presence of the quest in its "most ideal form" that not only animates him, but his personification of heroism, as well.