Well, PM did say dog with unconditional love and you love him back.
It would feel wrong to just go off to the pound and replace your companion who you cared for since it was a pup which in turn, cared for you.....
Yes but it defeats the whole purpose of the dog to just kill it off and not replace it with anything because then all the cool stuff that you got for the dog:
Balls, tricks, frisbees etc. would become useless and ruin alot of the game for some people so i think IF the dog dies it will be replaced and IF it isn't killed then nothing much will change
Well. Maybe it will just turn evil or good (which ever road you choose) and that will be its "aging".
OR
Maybe there are times in the game (or skills) that you can take years away from your dog and make it younger (similar to the temple of avo/skorm).