The Dragon pit explanation is a lie (Spoilers Extended)
The idea of the dragonpit having an unhealthy/stunting effect on the dragons is an in world theory put forward by "the maesters", which is often taken as fact at face value by much of the fandom.
However when actually one examines the claim against the information we got in WOIAF and F&B, IMO it falls apart. There are no signs at all throughout all the time F&B covers of the dragons slowing growth or suffering any ill effects from being stabled there. Instead I find there is a lot of evidence against it.
For example Vhagar grew to her huge size while largely being stabled in the dragonpit.
Caraxes is noted to be an especially fierce dragon and he hatched and lived the majority of his life stabled in there.
Vermithor is another dragon that grew huge living most of his life in the pit. He was younger than Dreamfyre and spent more of his life stabled in the pit than Dreamfyre, and yet during the dance of dragons he was the bigger dragon of the two.
The fact that the maesters give this idea as an explanation to the dragons suddenly being deformed and not able to survive infancy/adolescence, when it is so obviously flawed, IMO lends more credence to Marwyn's claim that it was the maesters themselves who killed the dragons off.