I hear it time and again in the D&D crowd:"I've played D&D for X-years and never encountered a dragon","I've DM'd for 25 years and never used a dragon.". Really, wtf folks?
The name of the game is Dungeons AND Dragons; there is an implication that folks will run into dragons now and again. Look at the original rules, a walk outdoors resulted in an encounter with dragons an awful lot of the time according to the encounter charts. In the first basic set we had a few different dragons presented in all their glory. In the 3.x versions dragons ans half-dragons were all over the place. So what's with the "Here There Be NO Dragons"?
In my campaigns I use dragons. My first huge two level dungeon had a red dragon on the second level. I use dragons to indicate an NPC is a bad-ass or a place is dangerous. White Dragons circling the highest tower of the Snow Queen's Palace, a witch riding a skeletal dragon, A dragon laying beneath a king o his throne are all pretty good indicators of the power of those involved. Dragons are excellent scenery, they are more than a bundle of stats.
The fierce bundle of stats attached to dragons may be why the occasional DM avoids dragons: dragons can be party killers, I'll agree they can be. When played as a bundle of exp waiting to spit out gp or when enshrined as the monster above all other monsters DM's and players are missing out.
Dragons need not be ever present to remind players they are in the game but it sure sets the mood to have one fly far overhead or hear a cow was snatched from a local field last week. Some players might loose focus and go dragon hunting or abandon the adventure to go hide (or level up) before tackling a dragon. Such diversion can be a good thing as the player are chasing a new goal in the first case and reacting to the environment in both. It's bad when players think every glimpse of a monster means a fight is coming: players and DM should be able to do more with the game.
In my estimation young dragons should be encountered far more often than the older apex predator-demigod dragons. A young (and relatively weak) dragon has to aggressively seek treasure and as such will be founds causing trouble. Such dragons should be the ones most often encountered unless civilization has diminished the young dragon population to cut down on the dragon inflicted chaos.
It is these dragons player will test their blades and spells upon: every dragon need not be Smaug or an even more fieree elder worm.
Some argue dragons should always be of demi-god like wrathful power to keep therm important and this why they are so seldom encountered. To such a notion I must ask is every npc warrior Conan in his prime, is everynpc magic-user 10th level or higher? If they aren't why must every dragon be overwhelming
Beating a dragon at 2nd level with a two handed sword is something a player is going to remember far more then defeating a more dangerous beast that lacks the gravitas of a dragon. Use dragons for the imagery, scene setting, challenge and power they represent. Don't short yourself and your fellow players for fear of a failed save vs breath weapons.