I disagree. If you read it again, it says the following:

"He was a fool to bear that grudge. To think he might have been on the other side—might have become the Dragon himself, had things turned out differently. Still, fool or not, he was extremely dangerous, and Graendal did not like being ignorant of his plans".

That passage starts by conveying the message that Graendal believes it foolish for him to hold such a strong grudge against Lews Therin.

GRAENDAL then reflects on the fact that it is ironic that Demandred holds such strong anti-Lews Therin feelings when he could so easily have been on the side of the Light, and been the Dragon himself, had things only turned out differently. It is GRAENDAL thinking that. It is not Graendal thinking that DEMANDRED holds that view.

Look at the context.

"To think he might have been on the other side."

That is not foolish. He WAS on the other side. That is clearly Graendal reflecting on how easily Demandred could have been on the side of the Light instead of being one of the Chosen. It ties up with what the BWB and Mesaana has said before.

In fact, it almost paraphrases both those sources exactly.

Graendal says Demandred is foolish to hold onto his grudge for so long. She does not say it is foolish to think he might have been the Dragon. In fact, she is actually stating HERSELF that he might have been Dragon.

Unless you believe she also says it is foolish to think he might have been on the side of the Light, which WAS the case and would have continued to be the case if things had turned out differently.

In summary, if you read the passage in context, Graendal clearly acknowledges that Demandred might well have been the Dragon if things had turned out differently.