So it says in The Children of Húrin by Tolkien (and his son) that the Helm of Hador — also called the Dragon of Dor-lómin — was made by the smith Telchar, who had, ‘in defiance’, put ‘a gilded image of Glaurung the dragon’ on the crest.
It also says that ‘the hearts of the host of Hithlum were uplifted when they saw it towering high amid the battle’.
Why, though? Wasn’t Glaurung one of the most potent symbols of Morgoth’s power?
I think you answered your own question: defiance and also encouragement.
Why do Christians wear crucifixes, a potent symbol of state power over life and death?
Why do members of ethnic groups often call one another by a term of abuse used by another group?
They do so, in some way, to thumb their noses at something beyond their power to control or change. In this case, as you say: ‘the hearts of the host of Hithlum were uplifted when they saw it towering high amid the battle.
