They can breed in world gen if they have the child tag. If they can't breed in dwarf mode, as Cocoprimate's experience suggests, then that's probably a bug.
My conclusion that they can't breed in dwarf mode when the megabeast tag is on, is because after in-game years of fruitless trying, the first try after I took out the tag was successful. From which I inferred it needs to be out to work, though it could have been just chance and in fact maybe they can breed with the tag on. Then came a few failed conceptions, then the second successful one, and then a few more failed (2-3) conceptions. I don't have a mature female yet to keep doing dragon egg !!SCIENCE!!, because I sent the axe lords after the original mother and the juveniles are still too young, but rest assured I will attempt to have a successful batch of eggs with the tag on to confirm or refute this, once I have another female in egg laying age.
From your raws, you didn't add in a body detail plan for the egg materials. That's probably the culprit.
[BODY_DETAIL_PLAN:LEATHERY_EGG_MATERIALS]
would be the one fitting for dragons.
I'm going to try this.
It seems civ egg laying races use a different method to determine fertilization than animals since with civ races it seems nearly 100% when done correctly from my own testing. But I only studied with intelligent fortress race eggers, and that would hardly be the only thing different about it so it doesn't surprise me.
If it was a fort of egg layers you probably had more than one male present, I think, from my experience, that helps assure conception.