I think they were just so panicked, they didn't know about the worms yet, and they were too focused on engineering the fire lizards up to pony-sized dragons, they just figured going to the rockier northern continent and moving underground was their best bet in the long term, iirc, which led them to abandon .. a lot of technology a little earlier than they otherwise might have. The whole purpose of dragonriding was to try to spare cropland and necessary forested area from Thread, and that was easier to do if they didn't have to protect houses, too.