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Preheat oven to 375F. Cook butter and fresh sage in small saucepan over medium-heat until butter simmers and is well flavored with sage, about 4 minutes.
Toss potatoes with dried sage and 2 tablespoons sage butter in bowl. Sprinkle with salt and pepper. Transfer potatoes to 2 baking sheets. Bake 20 minutes.
Toss shallots in same bowl with 1 tablespoon sage butter. Season with salt and pepper. Divide shallots between baking sheets. Roast until potatoes and shallots are tender and golden, turning occasionally, about 35 minutes longer. Transfer potatoes and shallots to large bowl. Add remaining sage butter; toss. Season with salt and pepper.
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