i have a feeling people use the Dreamsleeve concept more because you all feel a "proper" afterlife is not as fitting as a recycle bin.
Lord of Souls largely confirms it (without naming it as such), and the concept has been around since before the introduction of Sovngarde (it first came up in Battlespire, though there it was used mostly as a transmission network, a purpose which still survives in obscure texts). Here's a http://imperial-library.info/ForumArchives/Concerning_the_Dreamsleeve.html backed up on TIL about it - read Proweler's post. As you'll notice, if you haven't already, the dreemsleeve isn't just a replacement for an afterlife or a recycling system for souls - it is a current that underlies the fabric of Nirn and allows for extra-temporal travel and transmission.
Why can't it work like a Daedric Realm then? Shor created it for nords as you said who die valiantly in battle?
It could, and it may. As I said, I'm not in a position to draw a fully informed conclusion at the moment. My point is that it must exist in relation to the established, rather than being a separate and unrelated phenomena.