I believe it was involved in a couple quests since I can remember two different instances when you use The Echo around it.

The first (this is the quest I can't remember) is when you see a flashback of a knight who is unconscious and stranded. He sees the statue as a dragon and he's running away from it as it seems to be spewing fire at him. This was probably actually the elementals that reside in the area casting magic at him while generating some illusion of the stone being a real dragon.

The second is involved in the CNJ series of class quests when you learn that the conjurer, Brother Morys, is actually a wildling. He feels this calling to get back to Ishgard (where he's apparently from) but the elementals' hold on him keeps him from leaving the Twelvewood. A flashback shows him as a child huddled up near the rock while a pack of wolves descend upon him and you save him.