Thats ridiculous. If you had a big apartment and a big dog, wouldnt it be just as bad on the dog? 700 sq ft with no yard and a 50 lb dog would be miserable. Your argument doesnt scale at all.
I'm an apartment renter and I've lived near many dog owners. I make it a point to introduce myself and offer to walk their dog(s). Without fail, the dogs are beside themselves with excitement when I get them.
Dogs especially need lots of space and exercise. What a pet owner may think is a big enough apartment may not be.