The 6809 and accompanying Motorola 6833 SAM chip in your Dragon that handled the graphics was originally meant to be a video terminal - and uppercase was just fine for that. The later versions of the SAM did have a proper lowercase. Those showed up in later TRS-80 CoCo II but took a bit of prodding to activate.
Actually, the 6883 SAM (synchronous address multiplexer) is the DRAM controller and the 6847 VDG (video display generator) is the one that has the various video modes. See the character set implemented by the internal ROM in figure 20 of https://people.ece.cornell.edu/land/courses/ece4760/ideas/mc...
