Second the neighbor has never "seen" the police dog before, something about this story is just not fitting together. You have a cop and a K-9 cop living by you and you don't know what they look like.
The article says that the neighbor is 1/4 mile away. He probably didn't know the police officer, especially not well enough to know he had a dog. Heck there's a state trooper that lives 1/4 mile away from me, and I don't know him, all I see is his car. A cop lives behind my house, I've never talked to him.

I don't know. None of us want to see any dog shot but I feel there are factors that haven't been said. Wolfsoul put it correctly.