So, my interpretation of Panko's dog-acquisition story may be way too cynical, but it honestly sounds to me like the wife of her brother just got tired of the dog for whatever reason and decided to get rid of it.
Like, i get the initial reasoning of "little kids don't understand how to behave around a little dog and end up hurting it", but then Panko clarified that A)her brother didn't want to give the dog away and B)his wife apparently shot down the idea of actually disciplining kids and teaching them to behave around the dog, which is just weird.