Hic sunt dracones ["here be dragons"] was only ever used twice. The most famous example is the Hunt-Lenox Globe ca. 1510 where the inscription appears on the east coast of Asia. On the globe, the phrase appears as HC SVNT DRACONES. The other is a globe etched on an ostrich egg ca. 1504. There's some evidence to suggest that that the Hunt-Lenox Globe is a copper cast of the ostrich egg.

The practice of depicting dragons and other mythical creatures onto maps to denote uncharted territory in itself is not uncommon - this page has a good starting list plus some great additional information on the history of the phrase. The phrase may have been inspired by the use of mythical creatures in older maps.

Followup question: I once heard someone postulate that as new territories were explored and populated, the maps expanded. Since "everyone knew" that dragons and other mythical creatures existed, but it was equally evident that they didn't live in the new territory, the abode of these creatures had to be the yet-unexplored part.

Is this a reasonable explanation, or did I hear someone making stuff up?