To me there's a big difference between paying for expansion and the Dragonarium. The game is advertised/promoted as one where you get these amazing Dragons that you can display on your islands. They don't tell you that they release a new Dragon every 2-3 days, you're going to run out of room, and you'll have to pay to lock them away in a storage building (which you also have to pay for). I really don't mind paying for expansion, because at least that's part of the game. The Dragonarium I feel like it actually takes away from the game.
As for the Ancient World, I'm sure if you polled players they would have, or would still, vote to use all of that space as part of the original Dragon City, and you could make all of those Dragons breedable for players who don't have them. They tried to sell it as this fancy new thing that didn't need to be.
I understand the space concerns with the servers and why they can't just expand as well, but again, this is a self inflicted wound. They're determined to release new Dragons constantly, which drives the need to expand. If that's going to be your business model then you need to find a way to deal with the repercussions, like the constant need to find places for all of them.