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Level 3 dragons are a blast at th8. If you had the elixir ready to upgrade the lab as soon as you turn th8, and then do the level 3 dragons, you'd pwn it up during your early th8 career. That said, by the time you get to th9, you probably won't be using them except for support roles. So, it's not game killer, but I would try to level up and become proficient with every troop type.
Dragon is a beast they don't even care if your walls are well upgraded!
oh Balloon + Minions? another alternative but for TH9+
Dragons is expensive and much OP :P
At TH7, I think Dragons provide a consistent 3 star. At TH8, which is my current lvl, I feel they are less effective. Maxed, centralized Air Defenses, like a good base should have, can take care of dragons. Balloonian isn't that great until lvl 6 balloons which is a MASSIVE improvement over lvl 5 balloons, unless the ADs are low lvl obviously.
I'm personally sitting on lvl 2 dragons and not really prioritizing them at all. However, I still use dragons in wars occasionally. I maxed my Tier 1 troops and giants first, and now I'm maxing troops for GoWiPe. About half-way done with that.
It's possible. You could do Gowipe at TH8 instead of dragon raid. You just need the upgrades, but dragons are more reliable and cheaper if you don't have the upgrades to do something like gowipe.
A list of strats.
http://clashofclans.wikia.com/wiki/Attack_Strategies