Reply 78#78 bala's post
What exactly was Merlin to do when Uther wanted to use the sword that he said was fit for a king? He is a mere servant, he had no idea that the king would be the one walking into the armory, or I am sure he would have hid the sword out of sight.
As far as a punishment, the dragon was mostly disappointed that Uther was not killed, and Arthur was ruling with the user of the sword. The fact that it is in the lake, only keeps it safe until the day comes that Arthur needs to wield Excalibur.