I think it depends upon the breed of the dog. For example, bergamaschi have been bred to be with the flock at all times, and in the domestic setting the family becomes the flock, so their instinct is to be with the family at all times. Our bergamaschi are such "with you" dogs that they would not be happy in an outside kennel if we were indoors. And Evie, our border collie, hates it even if we are in different rooms in the same house, and tries to herd us all into one room, so she would not be happy outside if we were inside.

And, to be honest, I don't think I'd sleep at night if my dogs were outside - I'd be too worried about them being stolen.