Considering the whole damsel in distress and become my heir when you kill the dragon type of thing, I doubt that dragons are less of a draw to knights in shining armor than demons. In fact, most demons are under the firm control of the accursed masters, dragons are not (or at least I don’t think so). The rabid reaction to Tom is not just because he is a demon, but because a silly priest is convinced Tom is the leader of a demonic invasion*. Finding hundreds of demons amongst the Wizard Council did not help. If people expact a dragon invasion I am sure the reaction would be worse 😉
* I suspect most demons would find the story incredibly funny, at least those demons who love a bit of chaos and with some luck the accursed masters might be less likely to summon them in the future.