There have been a number of fantasy novels set in imaginary lands based on Wales. Lloyd Alexanders Prydain novels, for example, or Katherine Kurtz's Deryni novels, for example. But I don't know of any fantasy novels set in Wales or lands inspired by Wales which have talking dragons.
I don't see why a news story would have blamed Wales for bad fantasy novels with talking dragons merely because the founder of the genre, William Morris, had a Welsh surname.
That would be like blaming Scotland for fat American children because the McDonald's chain has a Scottish name, or blaming the Netherlands for various US Railroad problems because Commodore Vanderbilt had a Dutch surname. It would be like Latin Americans blaming Spain for their oppressive government merely because their dictator had a Spanish surname. Etc. Etc.
As for the suggestion that Gandolfo in a William Morris story was the source for Gandalf, Gandolfo is actually a real name. I have often thought it would be funny if newswoman Cathy Gandalfo covered a story at the Papal summer retreat of Castle Gandolfo.
But Tolkien very likely encountered the exact name of Gandalf in Medieval Norse texts. For example, there was Gandalf, King of Alfheim, a small kingdom in southern Sweden which has a name meaning Elfhome.