I don't think it's spoiling a dog to hold him, regardless of the size. I held my roommate's full grown siberian husky (and he weighed 85 lbs, big like a malamute), Nikolai. But, I did want to throw this out there just as a thought. I do think it's a bad idea to do anything to or for your dog when HE wants it or asks for it. Like if he's barking at you (which I saw that you mentioned it), and, you pick him up, I don't think that's a good idea at all. It's that whole NILF theory. And, don't terriers tend to be demanding and stubborn? I don't know, I could be totally off here, but, that was my first thought when I read this thread. Maybe even making him do something before you hold him, like making him sit or lay down or something. Just so he always knows his place in the pack. does that make sense?