Read "Disillusionment" at The Eldritch Dark:
This poem from Clark Ashton Smith (CAS) reads like the musings of an older man than CAS was when he wrote it; based on the chronology used in the Hippocampus Press edition of The Complete Poetry and Translations of Clark Ashton Smith, CAS was just in his twenties when he penned these lines.
The opening stanza presents a fantastical vision typical of CAS' early poetry, in strong contrast to the more banal descriptions of the second stanza. And yet the speaker's disillusionment doesn't feel quite complete; it may be that "the clouds are toy-animals for children...made of cotton-batting", but therein lies a nod to the imaginative powers of young people.
It seems there is a circularity at work here, as the speaker acknowledges the creative potential inherent in the daydreams of youth, while reminiscing about his own magnificent imaginings as a (presumably) young adult. And to complete the cycle, as an older man he has come back to the commonplace (yet fanciful) dreamscapes that he experienced as a child.
Perhaps the end result is indeed disillusionment, but that does not equal defeat; rather a coming to terms with the inevitable patterns of a long creative life.