Although it may look nice ,and those that do it may feel patriotic, I've never understood putting any flag so close to the ground that things like this could happen. Cemeteries may be the only place this display should occur. There aren't any dogs walking around cemeteries. There aren't cars driving by and splashing water and dirt onto the flags during a storm.,and hopefully caretakers of the property aren't allowing the flags to touch the ground.Also the American flag isn't supposed to be flown lower than any flag in its vicinity.
Regardless of how I feel if someone is allowing a dog to relieve itself on a flag something is terribly off with this person. IMHO