I would think both systems would exist and be used.
Technology certainly has its advantages (you dont have to be a mage or psionic to have a walkie talkie, and walkie talkies can be mass-produced without XP loss and weird exotic materials, and I would guess would be cheaper to make).
However, in Dragonstar technology can't BREAK the laws of physics, it must OBEY them, so, once you get into intersteller distances, communication by mundane, technological means, which would travel at the speed of light, would take years, even decades and centuries to reach their destination.
This is where magic, and psionics would come into play. I think it would be cool to have a guild of psions who operated as Dragon Empire communication specialists.