Holly's logic goes something like: We're dealing with a dragon; dragons don't exist; the dragon caused me physical injury, but that's impossible because dragons don't exist; I've noticed things apparently flickering in and out of existence; therefore, the world itself must be a computer simulation. While the objects flickering in and out is decent evidence--at least in the Eureka world--the focus on dragons not existing is weird given that, as Mal of Firefly would say, she is looking at some fair compelling evidence says they do.
The creature they encounter in the episode looks like a dragon according to the modern American conception of them, but it's not exactly confirmed to be a "dragon" as people think of the fantasy creature. "Dragon" is just an easy label to put on this mysterious creature, which as far as they would know may well have very little to do with the fantasy figure.
The reasoning that follows should be a series of hypotheses about its nature based on observation. Here are a few ones:
- The dragon belongs to an animal species that was recognized to exist in medieval Europe but escaped scientific recognition and was dismissed as simply legendary, while the species has survived somehow without being noticed until now.
- The dragon is a new animal created artificially and designed to evoke the dragon image.
- The dragon, though appearing animal-like, is actually of a mechanical nature.
Yes. It's happened. The Scandinavian sea monster the kraken, a giant octopus said to pull ships underwater, was based on the giant squid, an animal not recognized by scientists until the latter half of the nineteenth century, and with controversy. The first video footage came in 2004!
You like pandas? They were a Chinese legend until one was killed in 1869.
A more recent example from China is the Hoan Kiem turtle, which was thought fictional until one was photographed in 1998. These kinds of zoological discoveries have been known to happen.
That doesn't mean hypothesis #1 has to be true, though. Even with the precedence, the idea that the dragon they see is a lost species that managed to resurface suddenly in Eureka, specifically in the Astraeus spaceship, is rather implausible. Eureka is the setting of many odd scientific discoveries, but lost species that look like popular culture fantasy figures aren't the usual type.
Fargo excitedly says he loves dragons, and he and Holly are both fantasy geeks, so they should know that dragon lore isn't a unified popular conception. When Allison (or episode director Michael Robison) dreams up the dragon, the image of it is based on modern fantasy art. The monster problem that a lizard then mutates into has a bit of a Reign of Fire look to it. That image is very different from what the dragon was in medieval Europe, which was often a giant serpent as in the Lambton Worm story, or the armless wyvern as is depicted on the Wessex flag. There is an upright serpent seen in medieval art, which was the serpent from Eden before God punished it by removing its legs, but it wasn't until the upright serpent was evoked with the posing of a Tyrannosaurus rex that dragon imagery merged with dinosaur physiology (at least in the West). That suggests Eureka's dragon has more of a modern origin.
Given what normally goes on in Eureka, hypothesis #2 is more plausible. All sorts of bizarre experiments go rampant all the time. Some scientist could have created the dragon through genetic engineering or some other tricks. GD scientists are ridiculously successful with their projects, so the practicality needn't be seriously questioned.
There is also basis to hypothesis #3, the closest one to reality. There have been multiple sophisticated robots seen on the show. In the simulated backstory, the Astraeus crew saw several new robot designs. Why not a robot designed to look like a dragon? Take something like Tiny, package it up in a fleshy body like Andy's, and you've got a dragon robot. Holly witnesses a rendering error on the dragon where she briefly sees the wireframe model, but this could be explained by suggesting the presence of a hologram. They have seen realistic holograms, so one could easily be used to supplement the skin texture of a dragon robot or produce the image of the dragon from afar with its physical presence explained by use of forcefields or other mechanical means.
Questioning reality is another matter entirely. One has to forget about the dragon as an isolated phenomenon and instead focus attention on the world experienced. While philosophers like Descartes and Zhuangzi have suggested that the world could be one great dream and we wouldn't be aware of it, something which has influenced popular science-fiction, that is not a normal conclusion to come to. It's entirely possible, of course, and true in this circumstance, but I would put another round of reasoning in before jumping to that conclusion.
Holly believes dragons cannot exist, an idea she sticks to despite the fair compelling evidence. The dragon causes her physical injury, which should be evidence enough that a physical object we're calling a dragon exists, but she still can't believe it. And if the dragon that caused her physical injury cannot exist, then her body must not physically exist either, which throws her whole perception of reality into question, but this is not a good way to reason because the premise that dragons can't exist is flawed.
In the following episode, "Force Quit", Fargo figures out he's in the simulation from observing reality itself behaving oddly. He tries to drive out of town to find he's driving back into town without having made a U-turn. There is no landscape out of simulated Eureka, so the computer just spins you around without any observed acceleration. This is the kind of phenomenon that is worth questioning reality from, not an object reflecting a fantasy figure.
The dragon object does reveal computer glitches resembling rendering errors witnessed both by Holly and Allison. The NPCs try to play it off as exposure to some mind-altering effect from the Astraeus, which is possible. In a town like Eureka, that kind of thing could happen. When moving away from the dragon as an object, it makes sense to examine perception before reality itself. Here are some new hypotheses:
- They have some shared hallucination with regard to the dragon.
- They have some shared hallucination with regard to reality itself.
- Holly is the only real person and is imagining everything.
Hypothesis #2 is, of course, the real one. The Astraeus crew are plugged into a simulated reality. Holly comes to this conclusion after seeing things winking in and out, combined with her fundamental disbelief of the dragon, but she doesn't realize that only the Astraeus crew are real humans plugged in, causing her to run afoul of NPC!Carter. In fact, there's no reason to think that anyone else is real.
Hypothesis #3 is the option closest to reality. We all dream, and it is sometimes hard to tell if we are dreaming or we are awake. If Holly questions reality, why not go to the dream hypothesis? The Animorphs book #41 The Familiar presents what is most likely a dream where all of the actors within it are suspect, save for the protagonist, likely there only in mind. Holly's experience could be similar.
Honestly, though, I don't care that she jumps to hypothesis #2 in the second set so much as that she maintains such a firm disbelief in the dragon up to the point at which she discovers the truth. I don't care if she's right. It's bad reasoning.
I think it arises from a misunderstanding of science and its dismissal of legend. People think science is like a cult where you put faith in dismissal of legend to discover the subjective truth and if you choose the science truth over the neat legend truth, then you're an uncool fuddy-duddy. In reality, science is a large set of tested theories based on observed phenomena to create a best guess as to how the world actually works. A system based on faith dismisses anything that contradicts the establishments of that faith, while a system based on reason looks at something that contradicts the establishments and sees where the error lies, ready to change itself to match reality if necessary.
When Holly looks at the dragon, she sees something that conflicts with science as she understands it and assumes that the dragon itself cannot exist. When Fargo looks at the dragon, he is delighted to see something from his favorite fantasy stories and is eager to change his understanding of reality to allow the dragon to exist. That Fargo is depicted as very immature and Holly as considerably wiser points at Eureka's misunderstanding of science as a system of faith.
I actually think hypothesis #1 from the first set is true, and the dragon exists as a real animal unrecognized by science. Not in Eureka, but in our world. The legendary dragon was discovered in the python and the crocodile. The critters match several descriptions of the dragon of legend, much as the giant squid fits the kraken legend. As science expands, more and more creatures of legend are either dismissed entirely or seen to truly exist in some form.
The dragon exists.