Richard Wilbur was trying to imply that before the fire dragon came, everyone was strangely kind, and everything was in a weird state. Everything was strange before the dragon came.
The dragon was described as a "child grown monstrous" in a "childish country." After Beowulf defeated the monster and died himself, Mr. Wilbur says that the men remember what Beowulf did, but didn't remember Beowulf personally. They mourned that no kin came from him, and they were sad that no one else like him came along.
Richard Wilbur described the Anglo-Saxons as people who appreciated people for what they did, but not who they were, in a personal sense. They mourned the death of his actions, not himself as a character. If someone else like Beowulf came along, everyone would forget about Beowulf and start anew: "A name heavy with deeds, and mourned as one will mourn for the frozen year when it is done."
The Anglo-Saxons, as Wilbur describes, are a pessimistic group of people. At the beginning, it seemed to the Anglo-Saxons that everything was too good, that it needed to be worse. They weren't used to a peace, they were used to war, fear, and death.