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Kud nails it. Dragons - pureblood eleint - are, likely, the older powers around. And they have been supplanted by later races who even draw on draconic power themselves.
Cotillion makes the point in TB that almost every race (3 tiste and Olar Ethil for the Imass - hence, every humanish race) has its own dragon - and as of RG, we meet Rud, a Tiste/human mix who is also draconic, so the human race now has it's own draconic representative as well, more or less.
The dragons are powerful, but they are clearly not unstoppable magic killing machines as we see again and again. In effect, they've become natural resources to be harnassed by other powers.
- Abyss, wonders how you fit a dragon into a gas tank...
