I seem to recall that Gulch does threaten to own the farm if Em and Henry don't give up the dog.
As you may know, 'The Wizard of Oz' was the poorly-implemented theme for this year's Philly Fest (I missed your presence, fr_defenestrato, by the way, as did lots and lots of other people). This resulted in a few interesting conversations regarding the WOO.
Readers of my own blog may recall my horror at the realization, realized while skiing across some 14-mile-wide godforsaken glacial frying pan at the end of a fifty-foot leash, that 'Surrender Dorothy' was meant as transmitted, no comma, not a typo, and as such was a message for the wizard and not for Dorothy herself. The wizard's subsequent change of heart became clear to me, not as sympathy for a lost little girl, but as a cold scheme to trade the innocent for some breathing room.
Interestingly, while the character traits of Dorothy's real life acquaintances tend to coincide with the traits of the Oz-avatars, the wizard is an exception; Professor Marvel, the pre-dream snake-oil salesman who sends Dorothy home to his concocted vision of a swooning Aunt Em, would not appear to be the same person who would send a little girl to certain death at the hands of the witch. Maybe it's situational, though, and perhaps the snake-oil salesman would have just-as-comfortably sold Dorothy to a passing gypsy had there been one handy. Still, Marvel does speak kindly to his horse; how evil can he be?
During fest, someone pointed out to me that Dorothy was used by another ostensibly 'good' character; Glinda. At the very end, Glinda tells Dorothy that Dorothy had the power to return all along but that Glinda did not tell Dorothy since Dorothy would not have believed it. Dorothy might have been skeptical but she would have given it a try, don't you think? It would appear that Glinda, finding the Witch of the East under a house, quickly assessed the situation and realized that sending the rube off to see the Wizard might well result in some further consolidation of power between Glinda and the never-seen Sistah of the South.
So it seems that while Dorothy is genuinely supported by her flawed and goofy friends, she is never anything but a pawn in the hands of the two powerful characters who claim to have her best interests in mind.
I've never understood why the four witches, inarguably powerful, allowed the humbug 'wizard' to move in and set up shop. Perhaps he did perform some useful function for the witches but such a function is never hinted at in the movie.
One of these years I must read the Baum books. As I write this, I begin to see the populist perspective sneak through. Sure, the government claims to have my best interests in mind; the truth is that the wielders of power have their individual best interests in mind and that I am ultimately little different than Dorothy Gale, naively believing that if I place my trust in the powers-that-be I will be delivered safely back to the womb.