This is a weird question. They have hair, they have non-scaly skin... they're basically just regular folk with horns and a few other minor differences. They're certainly mammals, from a biological perspective. Their relation to dragons seems significantly more distant than their relation to Hyume(ans). If they have regular skin and regular hair, it would be weirder if they DIDN'T have breasts.
One might more reasonably ask, "why don't Lalafell have breasts?" They're mammalian, too, and probably nurse their young... yet the females seem to lack the facilities necessary to do so. Where are their milk glands, if there's no room for them on their chests?