I think we're asking the wrong question. It looks at mechanics as a way to build a heritage, when we should be looking at a heritage concept and asking what mechanics are needed to describe it. Create the concept. Flesh it out with no mechanics described, and then figure out how to implement the heritage you created with balanced mechanics.
Well then, my narrative thoughts about the dragonborn race:
They are charismatic (the shadow of a dragon's frightful or awesome presence), and tend to be physically hardy, capable of great feats of strength and surviving severe wounds. Of course their physiological connection to dragons is a defining characteristic: dragon breath being a major aspect. They are, collectively, proud and tend toward behavioral extremes: it's rare to find wishy-washy or neutral dragonborn, they usually go all out, paragons of virtue or freedom, or unapologetic tyrants or savages. Pride and draconic impulses tempered by a need to be social causes them to tend toward both positive and negative forms of patriotism, zeal, or dedication, but this usually means they have some idea of what they're comparing themselves to (albeit perhaps rose- or jade-tinted.)
I wouldn't call things like flight, water breathing, a mouth full of sharp teeth, or being able to breath fire 'just fluff'.
Yeah, declaring physiology has literally actually ZERO impact is a bit silly.
A bit of a thread-jack, but what I find more interesting is how little I see races played as races and not just a set of traits and mechanics...
Personally I find this quite sad, when it happens, as I think this is one of the best parts of playing a non-human being. What little ways can I infuse my roleplay with non-human elements? How does having a tail, or scales, or hooves affect a character? Does my diet differ as a dragonborn (e.g. their apparent healing factor in 4e, coupled with some other things, implies their diet is much more protein-focused than a human's)? How about language? Maybe there are some stock phrases or metaphors favored by dragonborn I can use, or there's a tradition of using your own claws for calligraphy so you can tell a scholarly dragonborn by the colorful ink stains on his fingers. Etc.
That sort of stuff is super fun and vastly enriches the play experience for me.
At what point would certain races eliminate other races that are in competition with them? Why are monsters- monsters? Mostly because they do not look like us or act like us. This leaves us with humans, elves, dwarves and halflings. Tieflings and Dragonborn likely would have been hunted to extinction. This is likely a 1e/2e position.
This just sounds needlessly reductive and hostile. Anatomically modern humans or their immediate predecessors appear to have lived perfectly happily with other humanoids (since, y'know, most of us today still have Neanderthal and/or Denisovan DNA...) Just because two species physically look different does not imply they would destroy each other. Indeed, many myths have reptilian or animalistic humanoids as gods or semi-divine figures (e.g. Erichthonius, or the Scythian Drakaina), and humans don't seem to have any problem accepting them as mates or proudly claiming descent from them.
Like...you're allowed to do whatever you want as a creator. Fiction is creationist. I just don't see why you would want to go for such a grim, hostile, "it's us or them" approach when it isn't required and "naturalism" of this kind is a total choice (and one
very often ignored in order to permit Cool Stuff that makes no naturalistic sense like dragons or owlbears).
But perfect balance is not needed,
Makes me wish people would stop raising the specter of a thing no one actually wants and everyone knows cannot be achieved. But "perfect balance is impossible!!!" is just too tempting a straw man, I guess. It's the Godwin's law of balance arguments: In any discussion about tabletop game design, the probability that someone accuses someone else of advocating for "perfect" balance (or an equivalent) asymptotically approaches 1 as the number of posts increases.