As humourous as this is, I think neither side in simulationism vs. gamism debate really wants realism. Otherwise dragons wouldn't be able to fly due to their wings being unable to lift their weight. What simulationists would want would be verisimilutude, which is merely the sentiment that what happens in the game world seems to follow its own laws and logic - and you can definitely have that without demanding realism!
The problem is that "realism" means two
really extremely painfully different things, and people use the two meanings almost completely fluidly. They often do so without even realizing that they mean two things that can be completely contradictory (but are not necessarily so).
On the one hand, "realism" means "looking and behaving like the real world." When applied to something that features dragons, as you note, then this form of "realism" is impossible. However, a LOT of people have a sort of instinctive, pre-rational expectation that anything you don't
really explicitly tell them doesn't work like IRL physics/chemistry/etc. absolutely MUST work so. This is where, for example, you get people complaining that dragonborn can't possibly have belly buttons or breasts, because they're
reptiles, reptiles don't
have those traits!!! (Never mind the fact that the text is explicitly clear that dragonborn children
do in fact suckle after hatching, because they are sort of the logical inverse of a monotreme, "reptile-like mammals" being my preferred term--they look like reptiles on the outside but are
internally mammalian.)
On the other hand, "realism" means "being well-grounded in established rules that do not change for light and transient reasons." When applied to something that features dragons, this definition of "realism" has no problems whatsoever--dragons can be quite "realistic" in this sense,
so long as they obey any rules established about dragons. Under this paradigm, anything and everything can be "realistic," up to and including ridiculous feats of magic and reality-warping, so long as there is a feeling of grounded consistency and continuity, more-or-less so long as the reader can feel like they
understand what is going on, or is able to "predict" future fictional states based only on knowledge of the present state and the laws (natural, magical, or otherwise) of the world. This sort of "realism" is violated as soon as an established pattern (whether or not it was explicitly established) is broken, especially if it is broken for seemingly
arbitrary reasons, e.g. Gwen Stacy's spine was only subject to the kinds of G-forces it would experience IRL for
one comic and, for basically everything else, Spider-Man's rescue is never going to put anyone in danger.
But, as I hope the preceding paragraphs have established, these two senses of "realism" are, in some sense,
exactly reversed from each other. The only thing they share in common is a desire for consistency, but one is an absolute stickler of only looking like the real world, while the other couldn't care less if it looks like the
real world so long as it works like it was
some world.
Because a person can fluidly (and sometimes unknowingly) shift between these two often-contradictory senses of "realism," essentially any discussion of "realism" in fiction generally, let alone gaming specifically, is
guaranteed to run into problems. The standards are constantly being shifted in contrary directions and thus no possible headway can be made. Someone can cry for "realism" in a game about riding dragons because fire breath should be capable of setting things on fire
because that's what fire does IRL, and then an instant later roll their eyes at some pedant talking about how there's no way people could be flying like that without a much sturdier and more heavily strapped-in saddle, yet battles can begin on a moment's notice.