This is the classic Mesh Tormentor workflow. An artist draws a base shape for a single scale, applies a gradient mesh to it, and colors it to look 3D. Using Mesh Tormentor, they convert this mesh into a BMG, then go to the Brushes panel and create a new Scatter Brush. Once the brush is created, drawing a single path along the dragon's tail will automatically place thousands of perfectly scaled, 3D scales.