This dream, I think, is the American Dream. Before the Great Depression, this dream seemed real: even immigrants who didn't speak English could dream it. This dream was based on a strong work ethic. But now, in the midst of near famine and economic upheaval, this dream seems no longer true. A strong worth ethic alone does not achieve it.
George and Lennie, no matter how hard they work, will not achieve their Dream Ranch. George, in this quote, I think, knows it. He knows that the earlier American Dream is a false one now. It is the dream that lures thousands to the promised land of California only to disappoint them, leave them homeless, and destroy their families.
In California, there is simply too much competition and not enough workers' rights for this dream to be valid any more. The dream is only valid for the bosses (The Boss and Curley) and not the workers (Lennie, George, Slim, Candy, Carlson, Crooks) or the minorities (Crooks) or women (Curley's Wife).
In short, The Boss lures these migrant workers to his ranch in search of a dream and hope, but--in the end--they only find lice, abuse, cruelty, and death.