I agree with Steno, that as long as the dog is fine and happy to be in such a small space for such long periods of time...then it might be ok.
Personally, I wouldn't have that type of dog if I lived in an apartment, unless I was home enough to give it the amount of exercise it needs. I want a dog. I've wanted one for a long time and I even have a decent sized fenced-in back yard, but I don't even have a dog yet because I feel I'm not home enough, and I really don't think it would be fair to leave a dog in the backyard for 10 hours a day. An apartment is even less appropriate. A balcony is worse than a backyard in that it's tiny...not enough room for exercise(unless of course it's a small dog) and it can be dangerous. Actually, I'm surprised that the dog is so well behaved because those kinds of dogs typically get bored when left alone and they needs lots of exercise. But, if the dog seems happy, there's really nothing to worry about, even though I don't agree with the dog being left on the balcony.