I tend not to think of these sets as part of any particular faction. They may come with a particular torso or shield, but they seem to be more 'hero characters' than anything else. If that makes sense. So I don't consider the dragon to be an oddity. I actually wouldn't be surprised to see another set like this with a KK2 character. Maybe a Red or White dragon this time (maybe eventually we'll get the whole D&D dragon catalogue, haha).
I have two of these sets. Got them on eBay -- 3 dollars a piece. For 6 bucks, it was worth it. Two dragons, two complete figs, etc.
My only gripe about this set was the halberd. I strained my brain for about 15 minutes trying to figure out how you use a halberd with one hand from the back of a dragon. I decided it's impossible and that the halberd was a silly addition probably made solely to distinguish this set from the very similar Batlord set.
I gave the halberd to a foot soldier and gave Cedric a spear, I believe, maybe a lance or a sword - I don't remember.
Great army builder, on par with the other single-figure sets. Nothing sets it apart, for good or ill.
Forge not works of art but swords of death, for therein lies great art.
"The Gods made heavy metal and they saw that it was good." - Manowar