It would totally work, however, I'm willing to bet this will be the final design, with some changes.
http://www.wetanz.com/assets/Uploads/JohnHoweSmaugalrg2.jpg
PJ would go for the classic, unlike Del Toro.
You must remember the final visions for the Balrog and for the winged beasts came straight from John Howe's painting, plus ideas from the team for the textures, the way it moves, etc. Alan Lee's Smaug is also very wyrm like.
So they won't be pulling a dinossaur looking dragon, he'll look relatable. Remember he must talk, so his face should display intelligence and mood.