Scenario: You're level 120+

If you only have the lvl 50 mount but are lvl 120 you cannot ride your mount until you obtain the lvl 2 and lvl 3 saddles. Although it may seem like a rip off and unfair it doesn't make sense that your dragon would revert back to a smaller size just for you to ride him...so the simple fact of the matter is you're stuck having to pay 100mil by the time you're lvl 120 if you want to ride your dragon (lvl 50 = 10mil, lvl 80 = 30mil, lvl 120 = 60mil).

Just wanted to add confrimation for this post. If you try to ride your dragon withou upgrading your saddle, it fails and you get a message saying "You cannot ride the taming mob with this mount/saddle combination" (not exact quote, but that's the jist of it).

I am level 130+ and only have a lvl 80 saddle and can no longer ride.