When I personally read the story, translated by Samuel Putnam, I saw a much different delusion. Which not only made him a protagonist, but a hero. Hero could have many interpretations, especially with a book like Don Quixote. But I see the general definition as right v. wrong, despite the complexity and nature of those ideas in themselves.
Don Quixote's role is to right wrongs, and while this is out-of-place, out-of-time, because knighthood is like the fairy tales he read, he eventually causes some good in the world. And this is how he is hero, indirectly.
The good I see he causes is chance meetings and chance fortunes in the story, so that by the end, everyone wants the knight back.
So I guess my question is: is Don Quixote delusional or heroic?