Dragons are born as humans but possess two chi or life energy, a dragon chi and a human chi. Basically no dragon chi means no dragon powers. It's likely that rotwood was wrong. Since his knowledge of magical creatures are lacking.
Not sure if the idea that dragon forms are their true forms makes complete sense either. Like CalvinKalisto said, dragons are born as humans. If their dragon form is their true form, then Jake and Hailey would have been born as dragons, which would likely have been painful and difficult to explain to their dad.
In addition, Susan has been exposed to danger a few times on the show. If she had latent dragon powers, it stands to reason that they would have awakened to defend her long ago.
I can't really explain why dragon powers skipped her generation, anyway. You can agree with CalvinKalisto's explanation, or put it down to recessive genes if you want to get scientific.