See, Kaychsea, here's the thing. If you didn't believe that fudging made you a better DM, why do you have such a problem with my refusal to fudge? Yes, for my group, it absolutely made a better story. It turned what would have been a fairly forgettable encounter with yet another critter to something that players talked about for weeks and still talk about years later.
Why not let them know when powers recharged? That's pretty easy to narrate- hey, the dragon's taking a big honking breath and fire is spurting out it's nostrils, it's going to breathe on you again! What's the point of keeping it secret?
They were losing a fair fight, but, you saved them. AFAIC, there is no "thing" to be ruined. The dice are there to tell you the thing. It's not my job as a DM to do that.
Look, I accept that you want to have more control over the story of your game. That's fine and no problem. Lots of DM's out there will agree with you. Just like in this thread, there are lots of DM's who will agree with the idea that the DM is not obligated in any way to compromise on stuff he doesn't feel like compromising about. Again, totally fair. If the players are happy, then great.
However, that being said, I find that the game is improved, and greatly improved, when the DM doesn't have a opinion about where the story "should" go. But, that's just me. I don't feel that "bad beats" only belong in Poker. I have no problems with the dice directing the story and, in fact, as a player and a DM, I insist on it. I'd be very disappointed to learn that the only reason we survived that dragon attack is because you fudged the dice. It totally robs the scene of any emotional impact.
I mean, heck, the players could have retreated after the second breath weapon no? The players could have surrendered. The players could have done a thousand different things. But, no, they fought to the bitter end, safe in the knowledge that the DM was going to bubble wrap the encounter and protect them. No thanks. That's not for me. If the dice declare a TPK, then, guess what boys? It's character generation time.