Maybe, but dogs (or any animal, really) require constant care in a way that machines don't, and need space and staff for boarding, exercise, veterinary care, etc.
(Unless somebody is working toward a cheap pen-sized dog...)
For better or worse, we already manage large numbers of cattle and chickens. For the most part we don't feel bad for them. Treating dogs in a similar fashion would probably not be socially acceptable. What does the use of diagnostic dogs look like at scale?