It's true, this has some basis amongst Muslim scholars. The majority hold the view that the dog's saliva is najis or impure. Again, not generally the dog itself but only it's saliva although the Maliki (one of the four Sunni theological schools of thought) do not view dog saliva as impure. There is a further more extreme version who advocate the killing of all black dogs, these I have never met in real life nor have I personally witnessed or listened to a scholar advocate such (perhaps it's related more to the types of scholars I have a preference for).
If anyone is interested, here is an in-depth article relating to Dogs in the Islamic Tradition and Nature, I took some interesting parts out
Dogs in the Islamic Tradition and Nature (Article Included)
Thus the idea of dogs being impure/pure is contested the idea of killing dogs is something else entirely that most scholars have ruled out. Furthermore, the idea of taking action and killing dogs who are the property of others is strictly impermissible and the fact that dogs roamed free in the city of Medina directly counteract
any reasoning that would ban dogs from society. Thus I find these people to be beyond idiotic.
Furthermore, if you go to any Arab or South Asian country you will find that dogs are popular household pets.