Hey, if the dragon's family wants some action, bring it. Same trick would work on them too. I'll carpet my home base in red dragon leather.
Ultimately the strategy is exploiting the two glaring weaknesses of dragons: low touch AC and low Dexterity. Now, typically it's not a problem since most effects that inflict Dexterity damage or drain are either poisons with a fortitude save before they work, or spells that are subject to the dragon's extremely good SR. It just so happens that this one item manages to bypass both defences completely. I'll most likely get a pass on this strategy for the current encounter for creativity, then there'll be a houserule that it's banned from future games.
Frankly, I see it as fair turnaround for the DM throwing a creature at us that's 5 CR levels higher than the party average. It's pretty much expected that we'll have to find some loophole to defeat it, since there's zero chance of us surviving a straight up fight. If the intention was for a balanced encounter that involves standard combat, we should have been given a monster that was level appropriate. It's certainly not like I haven't investigated alternative methods of completing the encounter. I initially approached the dragon diplomatically, offered it a 1,000 gp tribute, stroking its ego and doing the best I could to attempt to have a nice peaceful chat. It demanded all my character's equipment instead, then tried to fry me with dragonbreath when I declined. So now we're at the point where only one of us is walking away alive, and I intend for that to be me and my party.
As for traps at the end, if the DM wants to play sore loser and screw us over on the loot, that's not something I can control so I'm not gonna worry about it. I'll still have the rogue check the horde over for traps and give it a good old scan with Detect Magic before we loot the thing though, because you can never be too paranoid.