here it is from an artists point of view, first i would NEVER take anyone pictures with out asking permission FIRST, and second, i would not charge you for the painting of your own dog...if i was to do something like this you would be the first person to get the original, as long as i had your permission to do the painting/sketch, and then i would ask if it was ok to reprint the illustration and you would get the original painting/sketch...
personally i think it is wrong to do, to me its like coping someone elses artwork...and asking permission would be the first hing in order...
this person is just looking to make money by asking you to buy the original, which i think is rediculous!!!
i have done pet portraits, but ofcourse the person is requesting that i do this and is paying me to do so...
this person did not...i see that they want to buy prints from you, heck sell em if ya want, but make sure you get the $$ first and then send the prints to them...
my 2 cents from an artists point of view...