Alright, I think that the material needs to be considered here. I think that a blue dragon could fly into loose sand dunes at around its burrow speed (at an angle to the sand) without any problem at all (maybe very minor impact damage). I think that the faster you fly into the earth and the harder the material (in terms of hardness, sand is softer than mud, mud is softer than loose dirt, loose dirt is softer than normal earth, and I don't think rock will work), the more impact damage you would take. I think that I would only allow a burrow-dive into sand, mud, or loose earth. Anything else would most likely require a landing first, in order to get a purchase on the material. In fact, I think a blue dragon flying into loose material like a sand dune at or around its burrow speed should hardly hurt at all! And "falling damage" is a bit of a misnomer in this situation, it's more like "impact damage". Most dragons would probably fly into the earth at an angle, anyway.
And yes, for sake of coolness, it should be considered. Blue dragon flies high into sky, blots out sun, then folds wings and dives, loosing breath weapon as it drops, smashing into the sand in front of the adventurers and sending out waves of debris... cool.
javcs said:
On a slightly tangential note:
What about swim/fly? Swim/burrow?
Swim/fly, no problem. A streamlined dragon like a black dragon, if properly prepared, should be able to make a sky-high dive into deep water with no damage (assuming they don't hit bottom). I don't think flying into water, even at top speed, should cause ANY damage at all.
As for swim/burrow, the only dragon that comes to mind is a White Dragon. I would only allow a swim/burrow rush with the side of a sandy beach, but ice would probably cut movement speed in half and require a full stop. Just a guesstimate, I didn't notice a rule anywhere for tunneling through ice, with White Dragons it just says snow. But, I would say that since ice isn't as hard as stone, they can go through it at half-speed.