In DND/PF, I use them all the time. BADD has sent me repeated notices, which I ignore.
They usually fight one around fourth level, about the earliest it makes sense to me. The campaign, set in my own version of FR, will be in several dragon's area, according to them, and trouble eventually happens. Dragons are more reproductive and not many survive young age to become an adult. I also age them faster, like adventurers, such that any age category of dragon could be encountered.
I think there are two things I try and do with dragon's. One, overall, it is rare that the characters meet something that, if it becomes a fight, they can't win. It might not be easy, it might cost them, but it won't be impossible. Two
I want to make it memorable. I want it to be something they enjoyed. Of course, I want that for every session and am hard on myself when it isn't.
DND/PF game mechanics don't allow for dragons to be truly scary, IMO. Alternity RPG dragons of Good toughness, much less Amazing, require a dragon slaying sword for the party to stand a chance or unique magic. Exalted 1E/2E (I haven't played 3E) dragons can be scary if treated like at least a second circle demons. And of course, never, ever make a deal with Dunkelzahn!