I don't think this is so unbalanced at all. It seems that the "Dance with dragons" is just another ending to the game just like the forge of the overlord, only more satisfying than building a few buildings and casting a spell. It is made for games that have drug on for much longer than they should have. The tech is placed at the farthest end of the tech tree, so it seems like it was deliberately put there as a game ender to me. Whoever researches it first, and takes the dragon lairs, wins.
I tend to agree with this ^ as Sky Drakes in MOM came very late in the tech tree. But, ooooohhhh they are sooooooo much fun to play with for a little while before you finally decide the game is over.
This brings me to the want of a conquered percentage adjustment at the start of the game. The player picks how much area needs to be conquered and determines the game is over. One shouldn't have to conquer 100% of the map to win domination or conquer. Even Galactic Civ II has this feature if I recall? Some game(s) have it I know though.