I had to pause 2/3 into the episode and hope to finish it today, but I didn't want to forget this thought.
Where can we look for an example of a PC playing a dragon that isn't overpowered at all? You might be thinking Quest for Camelot, and that kind of works, but those guys hardly count as a dragon. I'm thinking about Voyage of the Dawn Treader. Eustace becomes a dragon as a part of a curse, is somewhat useful as a dragon, but it's mostly a burden on him. His dragon form is eventually removed.
It might be a good first step into Monsters and PCs to let a player obtain a cursed item that turns them into a monster. This allows them to have the monster experience they are looking for, and if they hate it or it's overpowered, the curse can be removed and the campaign can continue. If I ever have a player who wants to play a monster, we'll try this experiment first.
You know, somehow the way you phrased that reminded me of a book I read that had a similar premise to the cursed item. Its in the lot RPG genre, the main character plays in a full dive sim game where he starts at top of the food chain leading a powerful guildbto the point of not needing a real job because he does so well in the game. Anyways though, he gets betrayed and given a glitched item that turns him into a random monster, he gets stuck as a goblin.
Now in it he ends up being corralled into leading a tribe and the story follows that aspect. You were talking about them finding a cursed item that turns them into a monster? What if the game starts after that fact, and they basically are forced to become monsters as well as their place among them? If it were me I would follow after the book in giving them a weak mob. Would give them a ton of moral quandaries, as well as giving you a chance to flesh out your monsters societies more.
The book's name is Life Reset (New Era Online Book 1) by Shemer Kuznits