how does this text fit into a course about fairy-tale-inspired literature

Metamorphosis is more of a gothic type fairytale. Kafka takes the motif of transformation and gives it a rather dark spin. Gregor is not transforming into something better rather than into something much darker. His bug is a sort of metaphysical punishment for his sins and unfulfilled desires. The fantastical transformation is the stuff of fairytales but also holds the gothic properties of fatalism and darkness.