The name dragonman comes from their model file names.
At BlizzCon 2010, it was mentioned in an offhand comment that dragonmen were based on unused concept art for a scrapped idea for a playable race. That concept art seems to be the one present in The Art of World of Warcraft, see gallery below.[2]
This article or section includes speculation, observations or opinions possibly supported by lore or by Blizzard officials. It should not be taken as representing official lore.
It appears that the fusion process was a failed experiment by Nefarian to create loyal minions with their original intellect. It might also have been an attempt by Nefarian to recreate the dracthyr.