The reason it received its name is because it is unknown what kind of beast this creature was. There is speculation that it was a large dragon due to the shape of the jaw and the ribcage, however this is difficult to prove because it has three curved horns atop its skull whereas the Drakes in Dungeon Siege only have two straight horns. Scorch also only has two horns and even he is not nearly as big as the skeletal remains of this beast.
Nevertheless, this easter egg does not prevent the player from continuing on and appears more as a visual gimmick. The remains cannot be collected nor destroyed.