Vita sand is not safe for young dragons. Dragons wont' drop dead on it and they can live on it with no problems. The thing is, if the vita sand is ingested, either accidentally or intentionally, it can cause impaction, reduce the acidity of the stomach, slowing digestion, it clumps up in the digestive track and as more is taking into the body, the higher chance it blocks the smaller intestines or fills up the bowel and then cause problems over time.
It may take 6 months to ingest enough calcium sand to kill a dragon, or 6 years...they may die of old age before its a serious problem. The thing is, it can also kill them very fast too..if your dragon happens to be the sort who likes to eat sand. Being calcium based, instinct may prompt your dragon to eat more of it, to get calcium or other minerals it is lacking in its diet...but because its far to coarse for proper digestion...it won't benefit your dragon at all. It just doesn't stay in the digestive tract long enough for the calcium to be absorbed. Calcium powder used to dust crickets is a billion times finer and can be absorbed as is. Calcium sand (there are many different brands of calcium sand, vita-sand is one kind...I just lump them all under the name 'calcium sand' its easier.) is too coarse.
As pointed out, bearded dragons don't live on beaches. They live in semi-arid to forested areas of Australia. There is all kinds of vegetation and trees..so they do climb but are not arboreal by nature. They will take advantage of high perches but providing tall enclosures in captivity...is wasteful.
Bearded dragons don't have 'favorite' perches..they go to the places they need to go that meets their biological needs. The only reason your dragon climbs 3 feet to get to a certain basking spot is because that is where he needs to be. He will be just as likely to use it if that same spot was 2' lower as long as it reaches the temperature he needs.
It is good you at least changed the red light to a regular white light bulb (or clear bulb) but to provide the best enclosure for your dragon, you will have to change what you have. In the long run you still have to get a larger more suited cage irregardless. Even if you only have room for a 3'x12"x4'cage..you can still provide a far better enclosure than what you have now. For a baby, it is far better to reduce the height by 2' and just have the 3'x 12" x 2' cage. It will be much easier for your dragon to have less of a climb to get to optimal basking temperatures without the excessive work of climbing so high to reach it.
My recommendation is to get rid of the vita-sand, use just paper towel for now. Or at least a colored plastic table cloth or shelf liner (non stick) if plain white doesn't appeal to you. If the change in light intensity has him eating and growing, then good, leave things as they are for now. But definitely start planning on building a larger more suitable cage to be his permanent home. It should at least be 4'x2' of floor space, max height of 2' (the cage can be on a table or have shelves designed to go underneath, if you want it higher off the floor). If length is a major problem (if your home has nowhere a 4' long cage can fit) 3'x3' (lxw) will serve just as well, basically you do want at least 8 square feet of floor space.
I do understand the current recession in the US affects many people and fiances are tight for many people. But just like with any other pet, owning one is a huge responsibility. Like a human child, pet animals rely on us to provide all they require to survive. I know many people will feel that children and pets are like comparing apples and oranges..which I know...its the responsibility of providing for the proper care..which is the same for both that I am referring to. If the minimum conditions a pet needs to survive are not met, it cannot survive, or it barely survives. But unlike a child, an animal can't tell you its hungry, cold, too hot, thirsty etc. Reptiles are even more difficult to tell if they are suffering as most don't make any sounds. A dog will whimper if he hurts or is distress. A bearded dragon can't. Thus, we have to learn how to recognize the signals they do give. Lack of appetite is a big sign something is wrong. In your case it may simply be due to inadequate light intensity. But if it continues to not eat well or gets worse...then you will have to completely reassess the cage you have and make the necessary changes.
Reptile care isn't set in stone, there are always many different methods to use. The tried and true methods are typically what is listed consistently here and in many other places. Adult cages, minimum size of 4'x2'x2', papertowel, newsprint, non stick shelf liner or plastic table cloth (tile is another one) for substrate for baby dragons at least, though can be used the entire life of the dragon. Children's washed play sand and soil are best for sub-adult to adult dragons, for those who want a 'natural' setup. You won't find anything saying heights over 24" is suitable for bearded dragons. They need the floor space more than height to be active and healthy. The narrowness of your cage makes it unsuitable for an adult cage, even if you laid it down on its side, to use the 4' of height as length instead.
-----
PHLdyPayne