Maybe not at the Oscars; but in the film it IS the avatar who wins out against the ‘real world’ of crippled Jake. Back to reality – NOT!
The end of Daniel Mendelsohn’s piece in the New York Review of Books draws the comparison with children’s books very plainly:
This moment of waking is, structurally, a crucial one; at the very beginning of the film, during Jake’s introductory voice-over, the crippled man has poignantly described the liberating but ultimately deceptive dreams of flying that he often has: “I start having these dreams of flying…sooner or later, though, you always have to wake up.” The final image of the redeemed and healed Jake waking up to his new Na’vi life is clearly meant, then, to be a triumphant rewriting of that sour acknowledgment.
But the implications of this awakening—in a character that Cameron himself described as an unconscious rewriting of The Wizard of Oz ‘s Dorothy (“it was, in some ways, like Dorothy’s journey”)—are not only different from but opposite to the implications of Dorothy’s climactic wakening. When Dorothy wakes up, it’s to the drab, black-and-white reality of the gritty Kansas existence with which she had been so dissatisfied at the beginning of her remarkable journey into fantasy, into vibrant color; what she famously learns from that exposure to radical otherness is, in fact, that “there’s no place like home.” Which is to say, when she wakes up—equipped, to be sure (as she was not before) with all that she has learned from her remarkable odyssey, not the least of which is a strong new awareness of her own human abilities—she wakes up to the realities, and the responsibilities, of the human world she’d temporarily escaped from.
The triumphant conclusion of Avatar, by contrast, takes the form of a permanent abandonment of the gray world of Homo sapiens—which, as Dorothy learns, may contain its own hidden marvels—for the Technicolor, over-the-rainbow fantasy world into which Jake accidentally strayed.
Compared with our Block 4, it’s a big step beyond the ‘how to deal with reality’ conclusions of John in Swallows and Amazons, of Tom in Tom’s Midnight Garden, Cassie in Roll of Thunder Hear My Cry, and even Harry in Harry Potter and the Philosopher’s Stone.