In general, mammals are capable of metabolizing and/or eliminating nearly any foreign organic compound over a long enough timespan, thanks to the mechanisms of xenobiotic metabolism. The liver contains a large number of enzymes of the Cytochrome P450 (CYP) family, which are able to catalyze reactions with a wide variety of compounds as the first (and most critical) step of metabolism. These reactions typically make the compounds hydrophilic, making it possible for the kidneys to pick them up and eliminate them. However, different animals express the various CYP enzymes at different levels; some are much more effective at metabolizing certain compounds (e.g. theobromine) than others. So, if an animal lacks a certain CYP enzyme (or it is expressed at a very low level), they will also metabolize certain compounds much slower (other enzymes, which are less efficient, will have to do the job).

So, basically: dogs lack certain enzymes in their liver which means that they metabolize theobromine much slower than humans - but that doesn't mean they don't metabolize it at all.

They can, just not very well.

We can too, but not perfectly. To get a lethal dose of theobromine a healthy human adult would need to eat about 10Kg of milk chocolate in a very short space of time (less for dark chocolates).

For most small dogs a normal ~40g bar is enough to cause concern, if an even smaller dog (i.e. breads that are sometimes called "toy" dogs) consumes a standard bar you should take it to the vet immediately as that could likely be quickly fatal.