Wild hornworms are poisonous, so that could be the problem. However, they are not native to Australia so may not be recognized by dragons as something that could be poisonous. Bright colors is pretty much a common thing used in the wild to represent poisonous. Then again, many animals mimic the bright colors and patterns to keep predators away. Just look at most milk snakes and kingsnakes, many have similar bright colors as the venomous coral snake but are themselves, harmless (unless you are a rodent or another snake, LOL). Dart frogs and arrow frogs also have this bright coloring to warn predators they are poisonous. Many caterpillars are poisonous to eat just as hornworms are but again, many are mimic poisonous species bright colors to try and fool predators.
Domesticated feeder horn worms are fed a special diet which doesn't contain the toxins wild horn worms acquire from their natural food, tobacco and tomato plants. This is the same with poison arrow and poison dart frogs. These animals don't produce their own toxins but can retain toxins consumed in the food they eat. Hence why the term 'poisonous' is most often used to refer to animals that are toxic to eat or handle but don't actually produce poisons themselves. Thus, animals that can produce toxins are normally referred to as venomous (ie rattle snakes, coral snakes, scorpions, spiders, etc.). This may not be the true origins of the usage of these two words but it is how I understand it anyway.
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PHLdyPayne