I'm at work, so this response will be brief, my apologies. The draco did not replace the aquila, as they were different types of standards serving different purposes. Draco- style standards originated amongst the peoples living near the Danube, and was adopted by the Romans as a cavalry standard sometime during the late third century. This is (in and of itself) unremarkable, as the Romans routinely adopted or appropriated elements of the cultures they interacted with. In Late Antiquity, the draco was one of several different types of cavalry standards. The aquila, by contrast, was always a legionary standard. It appears to have fallen out of use sometime during the third century. Reasons for this are unclear, due to lack of source evidence. I don't think it unwise to link the end of the aquila to the decline in utility of the ten-cohort legion, which over the course of the Principate (and accelerated during the third century) became displaced by smaller vexillations. The Romans continued to use unit standards of varying types throughout Late Antiquity.

Draco replaced Aquila? I'm not sure about that, but wasn't the Draco a standard of cohorts while Aquila was the standard of legions? Do correct me if I'm wrong.

As far as the adoption of the use of Dracos, Arrianus (in Tactica) said that it was a Scythian invention adopted by the Roman cavalry.