I have to say this. I read all this, I have had dogs my whole life. I also have a four year old and a home daycare. A dog who will attack a puppy WILL attack a child. A crawling baby especially. If you think puppy's annoy a dog, a baby is up in the dogs buisness like no other. We are very lucky to have the best dog ever. She loves our car, son and when the daycare kids get all over her she doesn't even car, she loves it! I make them back off for her safety. She's getting older. I have been around dogs who nip at puppies, and while it might be normal, these are always the dogs I hear about having to be re homed because of aggression when babies are brought into the picture. So if you have small children around I would make sure these dogs aren't around. I agree that putting a dog on a chain is very wrong and makes the problems worse and would never do that, but I would never have these dogs around small children.
Children, in my opinion, should never be left alone with dogs until they are old enough to know how to respect the animal's space. This is why many dogs attack children, not because they are innately aggressive in the first place. I can't tell you how often I hear owners complain of aggressive dogs. They tell me "he/she bit/attacked without warning" when in reality that dog gave every sign it possibly could to tell the owners it was unhappy with the situation. Dogs have pretty limited ways of telling us they are uncomfortable, so we have to learn to be more aware of these signs before fear or anxiety reaches the level of physical aggression.