I don't think we're on the same page here, RC. I'm asking the (deliberately loaded) question, "What prevents the DM from inflicting an unavoidable, not to mention winged and fiery, TPK on a low-level party, caught unaware?"
I don't believe this is the same question.
In theory, nothing prevents the DM from doing it. In practice, it doesn't happen because it isn't a particularly interesting story nor is it a particularly believable story.
The original question though wasn't, "Why doesn't the DM just come up with an excuse to kill the players?", it was this:
What internal logic prevents a great big dragon from flying a hundred miles and burning the PC's starting hamlet to the ground --and them along with it-- in a fit of pique
Let's look at the internal logic of a sandbox setting.
Let's suppose the dragon lairs on the edge of inhabited territory. Then, within a 100 miles of the dragons lair, there are probably a couple hundred villages and towns. That number was probably chosen as representative of the population density supportable by ancient or medieval agricultural practice. Why did the dragon pick this town in particular from the many hundreds of towns to choose from? Wouldn't it be more reasonable that the first at least nine or ten villages and hamlets that the dragon burns down be ones the PC's aren't in? And again, a dragon attack on a village of 200 or so probably doesn't mean the death of everyone in the village. Many might escape by scattering into the surrounding woods and fields, more than the dragon would likely feel like hunting down. Why of the 30 or so buildings in the village and the 200 or so inhabitants, would the dragon single out the PC's particularly? Why wouldn't the dragon start with say, eating a few cows or mules, or at least, roasting someone else's cottage first. You are describing an event that has pretty long odds.
And we still haven't said much about the ecology of dragons. If 1st level commoners live in farming communities, dragon attacks can't be too common or all the communties would be driven away. Likewise, any dragon that actively provokes nearby communities too much risks drawing the ire of powerful humans with nasty spells and wickedly pointed magic swords. The more a dragon provokes human communities, the shorter its career is likely to be. So, the attack on the PC's would have to be rather perfectly timed to the beginning of such a spurt of attacks, otherwise the conflict would have reached a head by now, with one side or the other emerging triumphant or at least it settling back to an uneasy peace.
Big long lived dragons get that way by not provoking encounters with heroes very often. Besides, big dragons eat alot, and probably spend alot of their time in a semi-torpid state to avoid burning calories. Otherwise, such a large predator is simply unsustainable in the ecology. The canonical dragon for me is Smaug. He lived barely more than a days hike from a rather large settlement of humans - most of whom had nonetheless never seen him. He appears to have spent most of his time sleeping on a bed of gold, until provoked by a certain Bilbo Baggins. At that time, the dragon became more active, until in a fit of pique it decided to avenge itself on the nearby human settlement. This turned out to be a very bad life choice. Although noone - not the dwarves, not Bilbo, not the inhabitants of the human settlement, and certainly not the dragon - thought the humans stood much of a chance versus the dragon, the dragon had not been counting on a hero with an arrow of dragon slaying rolling a natural 20.
So it is with other dragons. They live very long lives, but odds are that if they are going to die, its going to be some hero that does it, so a smart dragon avoids attracting too much attention to itself. If it beats 90% of mercenaries that come to slay it and take it's treasure, its never going to be an adult much less a great wyrm if it provokes even 10 encounters a century. Even 10 encounters in a millenium is probably too much. Most dragons wisely stick to themselves, and most humans wisely do the same.
So in other words, according to the internal logic of the setting which was derived with no thought about 'level appropriate encounters', the odds of what you describe happening are like a million to one. I don't bother rolling all the million to one things that might happen on each day. It would be boring, and likely unfair because my list would be biased, incomplete, and probably inaccurate. If I pulled such an encounter out of the air and threw it at the PC's, it just wouldn't make sense and would probably be an indication of bias against the PC's.
Again, a sandbox world is not a world where everything kills everything else on sight, or where everything fights to the death. It doesn't happen in reality, and there is no reason to believe that sort of thing is sustainable in a fantasy world either. Pretty soon, the whole world would be depopulated of either dragons or humans.
(As a semi-aside, one of the things I disliked about many 1st edition published settings is that I couldn't figure out why creatures like hobgoblins weren't long since extinct, since they always seemed to be provoking humans who had champions who could each slaughter them by the hundreds single handedily. It didn't make sense to me in terms of sustainable ecology.)