This is where I think you are going the wrong way. IF we were talking strict game mechanics, it would work that way. Instead, we are talking comparative analysis, which is a totally different monster.
??
Let me explain:
If you are a low level party, you won't encounter a Balor, Pit Fiend, Remorhaz unless your DMs out to kill you or you did something really, really dumb. However, you can encounter a red dragon, only one of the young type (1 or 2 hps/HD).
This is true. The 3rd edition equivalent is that you won't encounter a CR 20 monster like a Balor or Ancient Red Dragon in 3rd edition at low level, but you might encounter a Young Red Dragon. So, this ought to be no surprise to anyone. A single very young dragon is not a particularly great threat to a higher level party.
At high levels, you face the ancient red dragon. Any competent DM, to challenge you, isn't going to give you the averaged out big monster, he's going to give you the biggest baddest one he can make.
No this however is an unwarranted assumption in either 1e or 3e. When you are playing 3e, no one I know says, "Because these monsters are above CR 12, they ought to have maximum hit points." Likewise, in 1e, a DM would only say, "We ought to give these monsters maximum hit points to maximize the challenge" only if the party was signfiicantly above the levels the game was designed for. But once we start talking about breaking the mechanical expectations of the game like "monsters will have on average 4.5 hit points per HD", then we might as well concede that DM's wishing to challenge parties significantly above 12th level could just as easily have increased the hit points per HD and number of HD given to dragons as they could to balors or rhemorhaz. In fact, they did, and the official version of that became the 'wyrm' and 'great wyrm' age categories of dragons that will be familiar to players of later editions.
And the biggest, baddest versions of many high-powered 1e monsters are far more scary than the ancient red (the biggest baddest dragons around, save Bahamut and Tiamut).
This just isn't true. If you can find any 1e non-unique monster (ei, not Asmodeus) that is capabable of doing an average of 88 points of damage to every member of the party in a single round for 3 rounds in a row, feel free. The only other thing in that category is wizards of 17th level or higher, which is why liches, vampires with class levels, and arcanodaemons are also in the highest ranks of most dangerous foes you can face alongside the big dragons.
So you really can't compare a average big monster with an ancient red dragon, you would have to compare it with an average red dragon (~ adult).
This is totally wrong. A 'balor of the largest size' or a 'rhemorhaz with 14 HD' or a 'twelve headed pyrohyra' are not 'average' creatures. They are high end foes in and of themselves. Just as you would not give a 3rd edition Balor maximum hitpoints on the grounds that it was a CR 20 monster and therefore required them, you wouldn't do it to a 1e monster. The fact that dragons advanced in hit points per HD as they increased in size and not in hit dice (like a remorhaz, for example) was a rule mechanism unique to dragons. We can argue about how well thought out it was, and that's perfectly fine, but arguing that on the grounds that dragons and hydras could have 8 hit points per HD that all other high end monsters were intended to is just ridiculous. All you are really saying then is, "Under my house rules, dragons weren't particularly scary."
If you're going to compare the biggest baddest red dragon (ancient red) then you have to compare it with the biggest baddest X monster. (Jet vs. Jet)
Right, so you'd compare a huge ancient red dragon (largest size evil dragon) with a twelve headed pyrohydra (largest hydra) or a 14 HD remorhaz (largest remorhaz). You would NOT compare a huge ancient red dragon with a 14 HD remorhaz that the DM decided to give maximum hit points per HD (rather than rolling for them), because that is a customized monster. You might as well start comparing remorhaz's to a 3 headed 22 HD red dragon consort of Tiamat and using that to prove that dragons were dangerous. How a DM customized his monsters to challenge parties above 10th level, like my own 18HD manticores and the like or Gygax's demilich and 'King Kong' inspired giant ape god, aren't really a part of a conversation about whether dragons were dangerous.
But, even on your terms, you are just wrong. Because even if we compare a 14 HD maximum hit point Remorhaz versus a huge ancient red dragon, the red dragon STILL appears the more dangerous of the two. The Remorhaz does an average of 21 points of damage on a bite, but it will only successfully bite a party member every other round or so for an average of 10.5 damage per round. It has 112 hitpoints, so it might survive 2 or 3 rounds or so before going down having at most knocked 25% of the hit points off one of the parties meat shields. Granted, it has a 5% chance of insta-killing a party member, but given 1e's general 'save or die' style, that's no worse (indeed maybe even less scary) than a giant spider's save or die poison. Even if we bring its seemingly scary 10-100 damage from contacting its back into play, we are still only talking 55 points of damage on average. The problem here is that the Remorhaz doesn't have a 'back slash' attack and its hard to bring it into play. In most cases, its just flavor for the monster.
Meanwhile, that ancient red dragon does 88 points of damage on a failed save to the entire party. That's (given a 6 player party) something like 528 damage per round for the first few rounds. In an average party you are talking about after round 1, 4 party members having taken 44 damage (some are now dead) and 2 party members taking 88 damage (almost certainly dead). Without magical protection this is likely a party wipe. Nothing else in the game with the possible exception of archmages casting meteor swarm was like that.
The real problem is that you will never convince me that 1e dragons were tough because I am speaking from experience.
First of all, I'm not trying to convince you. I've already in an earlier post mentioned the problem of experience, and how 1e was a different game for everyone who played it. So I'm well aware that you are unconvincable. But I'm not trying to convince you. I'm trying to convince the original poster that he's got a bad idea, and I'm trying to convince anyone that hasn't got prior experience with 1e that dragons are in fact as dangerous or more dangerous than anything else in the game. Whether you believe that or not doesn't matter to me in the slightest.
My experience, as well as the experience of every 1e player I ever discussed this with...
You mean every other player other than me, because I'm also speaking from experience.
Let me tell you were you are going wrong. I'm arguing that 1e dragons were as dangerous as anything in the game. You are arguing that they aren't dangerous. So long as you don't try to claim that there is some large class of creatures in the game more dangerous that dragons, I'm perfectly free to agree with you. What I'm arguing is that relative to all the other monsters in the game, dragons are dangerous. I am not arguing that relative to a party of high level player characters that dragons are dangerous. The real issue isn't that dragons aren't scary, because they were certainly one of the few things that could threaten a high level party, but that nothing in the game was particularly scary to a party much above 10th level. The published monster supplements were really only intended to challenge a party up to roughly named level. That was a known fact, easily demonstrated by the fact that monsters were classified in ten challenge ratings (I, II, III...VIII, IX, X) which corresponded to 'dungeon level' they'd appear on which corresponded roughly to the player level expected to face them. There wasn't really anything in the book intended to challenge characters much above name level. By 12th level, even DMs which were fairly conservative in spreading treasure around had to start inventing new challenges to challenge players. And this is demonstratable from published modules intended to challenge characters above name level which also featured unique challenges. DM's weren't just looking for ways to make dragons tougher. If their campaigns continued into high levels, they were looking for ways of making EVERYTHING tougher. When 2e came along, there was greater realization of the fact that play was expected to continue to 15th level or higher, and dragons - in order that they would not be obselete at such high levels of play - were scaled up accordingly.
But I should also note that the 2e designers nerfed the dragons breath weapon because by that point it was well recognized that it was simply too powerful and too dominating of a weapon. There has never been an attack in the game that did as much damage relative to a PC's expected hit points as the 1e dragon breath weapons. They were grossly overpowered and the only way to survive a dragon was win initiative and kill it in one round, ambush it, or be aware of what you are facing and gear up with magical defences accordingly.
Seriously, I'm very conversant in 1e high level play and I can list just about everything in MM1 and MM2 and the FF that can be used unmodified against a high level party - including abusing typos and bad editting to achieve that end. Anyone want to face a 82 HD Jann noble?