I wouldn't clone my pets, I would find it creepy, but I don't really think it's cruel if they could live as long as healthily as a normal dog (I know Dolly the sheep didn't live very long). I'm pretty sure dogs wouldn't have the self awareness to think "Oh, I'm just a clone, I'm not even a normal dog," they wouldn't know any different.
I personally think that cloning technology is very useful (imagine recreating a human liver identical to yours in the event of needing a liver transplant), but many people are against it, so I don't think that it is likely that anyone will be able to pay for their pets to be cloned for a long time, if ever.