You can't target or damage (or even SEE) ground-based foes if you're a dragon. This is arbitrary, stupid, and
I think it is a good idea not to let dragons attack ground-based foes because then people could just become a dragon every single battle and there would be 1 or 2 archers in a group of foes......
it would just be plain to easy even on hard difficulty!
but thats just my point of view