It would only make sense that as a magic user grows in power the more their sanity slips away. How many bumbling old wizards are sane? Most are cracked in some manner, some moreso than others. Zedd (Wizards First Rule, Terry Brooks) was a voracious eater despite his scrawny appearance, and made monsters into pets, and swore by his socks. Gandalf, the iconic old mage wandered around smoking halfing dope, and following his nose, making fireworks and mischief while looking for the ring of power.
I like the Mage game in how it handles the use of magic. Heavy magic users gain magic residue over time, if they use magic responsibly, they accumulate very little, and stay pretty much normal. Those who are heavy users, or who cast spells hastily, make mistakes, and other such errors gain this residue very quickly. Some start loosing their sanity, others are struck catatnoic, the less fortunate are attacked by offended spirits of magic and such.
But I digress, this has nothing to do with dragons.
Dragons are magical, but are not cracked, why? Because, unlike humans, dragons are innately magical. Their spells and powers do not come in the form that we imagine. Their flight is magical, as their entire physiology does not support the mechanics of flight. Flyers have light build, little or no armor, and choose flight over fight in confrontations. Also, in a wing to body mass ratio, dragon wings are always drastically too small. If a human being had wings to fly, they would have to have a wingspan of something like 20 feet to lift our compact heavy bodies off of the ground. The breath weapon, unless the dragons consumes a diet of chemically combustable elements rich in sulfer, phosporus, and other reagents and regurgitate them to spew fire, it is magical. I like magical better than scientifically explained. The science aspect requires the dragon to seek out certain minerals to fuel their breath weapon which robs them of some of their mytique.