He could still burn a lot of things, thank you very much. Fortunately for everyone else trapped on the islands, Dagger doesn't have the desire to destroy innocents that runs through the rest of his family. He only kills people who come after him first. Or deserve it.

"I will happily breathe more fire. And I'll fry everywhere where people aren't. Human and not human."

Yes, well, this is Dagger. He isn't exactly known for brilliantly thought through plans in the heat of the moment.