I can completely understand the Dragon's feelings, the problem is, that while yes Satsuki possesses the saintess' SOUL, she herself is not that specific saintess, she is a completely different person. So the Dragon was operating on the assumption that Saintess = Satsuki, but that's not the reality. Like imagine if some super powerful person started stalking you, eavesdropping on you, trying to be up your a*s 24/7, all because you in a past life, a life that you neither remember or are directly attached to, was their best friend. That s*t would be hella creepy and unbearable.