I think heat is a consequence, not a cause. Heat is created because of friction, indicating rubbing of the sides of the drill on the walls of the wood. If the friction is too great, pressure is exerted outward radially by the pen and material inside the flutes of the drill, thus breaking the wood.
Some woods seem to swell when you cut, and the hole you are drilling actually gets smaller in diameter. Since the drill cuts only on its point, not on its sides, you need to retract the drill (and clean the flutes) so when it re-enters the hole, it trims off the sides that have crept in. Obviously, if your drill bit is not sharp, it will do a poorer job of this trimming.
A second problem in drilling blanks is blowout. This occurs when the drill tip exits the end of the blank. The end of the drill is pressing downward on the wood, and when the point has emerged, there is less supporting wood to press back against the force of the drill bit. Adding a block of wood to support the blank helps to alleviate this; not letting the drill bit exit the wood is obviously better if the particular wood tends to blow out.
Some woods blow out much more often than other woods.
I agree that if the point of the drill is not in the center of the drill bit, this could cause the drill to "wobble", thus putting undue force on the sides of the blank. This would also cause heat buildup, since as the drill turns, it is being actually forced against the sides of the blank since the tip is rotating eccentrically.
Given the loss of money associated with loss of blanks, and also the loss of time involved, it makes sense to me to invest in quality bits. You only need a few sizes, and the investment is not that great.
Just my opinion.
Joe