I think your views are based on a basic misconception that a lot of people have about dogs.
Dogs are pack animals.
One of the cruelest things you can do is to isolate one. They need to be with whatever pack they are a part of. The effects of isolation really depend on the circumstances. It has been proven, however, that isolation can lead to behavioral problems such as excessive barking, compulsive licking or other compulsive behaviors, and in extremely rare situations, dogs have snapped and attacked their owner. Of course, shelters have choices they have to make.