I am taking a bit of a pragmatic table approach but that's not all. The lawful stupid character comes about because the DM decided to challenge the player's conception of lawful good and offer only non-lawful good solutions to the problem at hand. Essentially he has set up a death trap for lawful good characters - or at least for characters that follow the player's conception of lawful good. To me that means the DM created the lawful stupid character - because the character wasn't lawful stupid till the DM put an unavoidable death trap for anyone playing that specific conception of a lawful good character in the game.
I'm specifically arguing against that - saying a villain that would set a lawful good death trap is more realistic is absurd. You can play any intelligent evil villain in a very realistic fashion without once resorting to lawful good death traps.
There's two problems with your argument.
1. You are insisting that any failure is automatically a "non lawful good" solution. Leaving the NPC to the dragon is not necessarily an evil or even willing violation of an Oath act. The problem comes in when you insist that your interpretation of Lawful Good (any result other than the paladin's death is an oath breaking) is so limited that it becomes Lawful Stupid. It's not that a Lawful Good death trap is
more realistic
. It isn't. But, it's also not unrealistic. It's actually quite plausible. Which means that in their style of games, where something being plausible means that it's quite possible to use, then obviously they cannot use such a tightly wound interpretation of the Oaths.
2. You are pointing to the player's conception of Lawful Good. But, throughout this discussion, it has always, ALWAYS been the DM's conception of Lawful Good and the Oaths that have been the sticking point. As soon as we put it on the player, the problem goes away. The character fails, but, that failure is not considered a break point for the character. It might need some atonement, but, such atonement is fairly minimal. IOW, from the player's POV, the character has not violated his oath at all. It's only because the DM is insisting on extremely limited interpretations of the Oaths (all paladins are Cavaliers or Captain America) that this is actually a problem.
IOW, the problem with Lawful Stupid is not that the DM has set a no-win situation. The problem is that the DM has set a no-win situation and then actively punishes the PC for making the best of a bad situation.