[Classic Uncle Sam]

I've always looked at Dragons as one of the top "monsters" in a fantasy universe. May be not the end all be all of things, but they definitely should be frightening and dangerous to tangle with. I don't know if they have to necessarily be indestructible or battleship tough, but they really should be quick and have raw devastating power.

I like to imagine that the size and speed of flight of such a creature causes even the stout to flee to safety. The aftermath of a fire blast should sap the will to fight and cause conviction to fail in the most battle hardened veteran. I doubt I would make the fear aspect a supernatural attack even the heroes have to roll save against, but I would definitely make the NPCs auto-fail or have to make a roll. Force the players into the role of the only ones capable of stopping the menace.

So for me many would fail to even dare to challenge such a thing after they've seen what it could do. Given the tactics it could employ outside of its hidden lair, it wouldn't really need that many hit points.

The what they are, for me, is the big deal. I feel like if its just an animal, its hard to fit into a semi-realistic world given the average person's notion of what it would likely need to eat (every day even). In High-Fantasy they're just there. But when you get lower than that and the world is wrapped in more common concerns, it will make it hard to wonder why the Dragon hasn't destroyed everything yet. So I always lean towards Dragons as magical for one reason or another.

I like how D&D: Dark Sun had the sorcerer kings wish to change into Dragons for more power.