They're doing the dumb shit where a country was strong and smart enough to conquer most of the continent but suddenly becomes completely incompetent because plot. It's fucking boring man.
The emperor seemed to have enough sense that taking care of dragons takes a lot of resources, and of course, gathering resources requires labor, which costs money to hire that labor if you're not doing it yourself.
Switching from dragons to beasts for fighting power might be a downgrade in combat quality, but it can be beneficial in numbers, if they know how to capture, tame, and train them. Domesticate them and give a couple generations, they could be a source of income to be sold as pets or working livestock like horses. The emperor has the right idea, but what matters is the execution, which I don't think will work out well for him if he's throwing that idea out there like it's nothing.
In other news, for the general of that empire who was previously from an opposing country, she seemed closely acquainted to Bleed, but I guess with him focusing so much on the dragons 24/7, he didn't think about seeing her one last time before leaving the stables. Hopefully with how little connection she has to the empire, she'll find some reason to leave and join him in the kingdom down the line, adding another member to his growing harem (dragons not included).