why sauron cant breed werewolves/dragons?

[mhagain]

For the Fell Beasts see Letter 211:

I did not intend the steed of the Witch-King to be what is now called a 'pterodactyl', and often is drawn (with rather less shadowy evidence than lies behind many monsters of the new and fascinating semi-scientific mythology of the 'Prehistoric'). But obviously it is pterodactylic and owes much to the new mythology, and its description even provides a sort of way in which it could be a last survivor of older geological eras.

Of course the letters can reflect fleeting concepts that may be subsequently revised when Tolkien has more time to think about things, and can contain errors based on misremembered info, but in this case it seems as valid an interpretation as any.

Maiar are - pendantically speaking - not "minor spirits of Arda" because the Maiar are in origin Ainur, who came from outside of Arda. There's a distinction in Tolkien between beings bounded to Ea and those not.

Hmmm. I wonder did the "everything must be a Maia" trope originate with David Day? It would certainly explain a lot.

Sauron in the First Age was certainly capable of creating werewolves, per Beren and Lúthien:

Therefore an army was sent against him under the command of Sauron; and Sauron brought werewolves, fell beasts inhabited by dreadful spirits that he had imprisoned in their bodies.

Of course David Day would probably claim that these spirits were Maiar too...

We have an example of Morgoth creating a werewolf, also in Beren and Lúthien:

...he chose one from among the whelps of the race of Draugluin; and he fed him with his own hand upon living flesh, and put his power upon him. Swiftly the wolf grew, until he could creep into no den, but lay huge and hungry before the feet of Morgoth. There the fire and anguish of hell entered into him, and he became filled with a devouring spirit, tormented, terrible, and strong.

Tolkien doesn't say it anywhere, but I imagine that a similar process was involved in creating the dragons.