The problem with your dragon form being unrestrained is if it can attack everything then your human form would be used less. Of course you would need to use it for caves and buildings and other interior areas. One thing that could be done is more anti-dragon zones be used. Not sure what the setting for the next game would be but I assume Damian would control most of Rivellon. If so most areas would have ADZ's, while you could bring most or all down you'd have to use your human form to disable them and then your dragon form could be used to fight the dragon defenses along with mop up anyone you missed. Another thing that could be done is you get an EXP penalty for using your dragon form on non-dragon enemies.
Like this idea. The best I have heard so far

The problem with Dragon vs ground is what others in different threads have already said:
1) either game is too easy, or you do not feel like a all powerful dragon, Master/Lord of the Skies etc. because everything would be able to kill your dragon
2) Human form would be at a severe disadvantaged and you could lose the sense of being a Dragon Knight, rather then a Dragon(many arguments to this, I know).
3) Some others I am sure :D, but can't think of at this moment, besides that the game would have to be drastically changed
I also like the idea that you do not gain much exp points if killing ground things as dragon, so that it punished players who are all powerful dragon all the time, till they have to be a human.