Here's the definition of swag according to dictionary.com.
1. A suspended wreath, garland, drapery, or the like, fastened up at or near each end and hanging down in the middle; festoon. 2. A wreath, spray, or cluster of foliage, flowers, or fruit. 3. A festoon, especially one very heavy toward the center. 4. A swale. 5. A swaying or lurching movement.
Whatever you think swag means, it's probably wrong.
I'm fully aware 'swag' is over used, but there's no need to get upset over it. This fad will blow over soon enough, just like 'epic'. After all, most people only started to say swag after Bieber did. People will forget soon enough.
I guess it works both ways. We learn definitions of words so we can communicate, but we also give words new (often transient) meanings. In this case, I guess the Author is just aiming for the LULZ and making fun of the modern use of "swag". And in my opinion he's more than successful
This picture reminds me that ponies have built their general harmony around the preservation of magical gems, which dragons eat. Dragons also obviously have no respect for ponies or their harmony. What is with that? Also Crackle is king of the castle.