Alright... YES, sand CAN cause impaction in dragons of all ages... ESPECIALLY young dragons. How often do you hear of peoples dragons dying from impaction? Not very often at all, however the risk is still definately there. If you truly believe that your dragon is not ingesting any sand and that you are doing everything to minimize his risk of accidental ingestion, then you can use sand.
There are many things you can do to minimize the risk of impaction:
Feed outside your dragons cage
Make sure your dragons vegetables sit on a relatively large sand free area to keep sand from sticking to them.
Sift the sand to remove large particles.
Give your dragon furniture to climb and play on to keep him occupied
Let your dragon out of its cage daily for exercise
Keep an eye on your dragon; some dragons just like to eat WHATEVER they can...even sand...
Doing these as well as other things you can think of will minimize your dragons risk for impaction.
Now babies, in MY opinion, should never be housed on sand as they are much more likely to become impacted. Babies should be housed on paper towels or similar SAFE substrate.
Another possible issue with sand is the dust involved; this is most prominent in childrens play sand. However dust isnt really a HUGE deal as the dust usually settles very quickly. But, again, there are possibilities of respiratory problems as well as vent blockage. If you let your dragon out of his cage for daily exercise, then he should be less active within his cage minimizing the dust he creates from activity.
There are also several different types of sand on the market. Calcium sand is probably the most popular because of its wide array of colors available; but its also the most expensive. Play sand only averages $3 for 50 pounds. There is aslo another made from ground walnut shell; i recommend staying away from this type because its granules have sharp edges and can tear the stomach lining.
So its a really a matter of opinion when it comes down the type of substrate to use. If youre content on using sand just be aware of the things above and you should be fine. I have been using childrens play sand for a year and a half now.