Personally, the whole dragon mythology is proof that human history should be taken with a grain of salt. I don't believe that there were fire-breathing monsters in ancient Europe or Asia (no proof). I do believe that it's entirely possible that there were large NON-fire-breathing monsters all over the place, and people (see: the telephone game) told stories, got scared, etc... word of mouth somehow made fantastical legends out of ordinary things. The fact that western dragons are 100% tied up in the occult of European past (wizards and witchcraft... excalibur anyone?) makes things even more story-telling and less fact-based.

I love dragon stories. I just don't think they existed here on Earth like the stories tell. Does anyone think Lord of the Rings is historically accurate?