it makes enough sense to me, first off he was already tainted by the eye from dragoon quest in ARR.
2nd, He's been fighting control the entire expansion.
3rd, the ishgardians have king thordans blood in them somewhere, which means they all have dragon blood in them, making them able to change into a dragons which was how Nidhogg made much of his own army.
4th, we did not even see a small fracture of Nidhoggs own power in his dungeon, as we learn later it was not his eye. Thus it is inevitable he will be a very powerful enemy to fight.
5th, the eye can take on any source of power it wishes, using Estinein as a conduit, Nidhogg was able to take the ascian power along with whatever else power was held within the other eye to empower his other eye.
6th, the reason he never took on the prince was because he was not killed, nor was the prince tainted by the eyes as he held them. He was however tainted by one over time, but a dead body would never be suitable for a new vessel.

<3