This is the perfect way to start on human androids. Cut our teeth on this, perfect this, then use the same knowledge to build humanform robots. The patents we'll accrue make it worth it on its own!
Best part is you wouldn't NEED to take them for a walk. No need to clean up their leavings. And if you wanted that part of the experience, it could be fertilizer, clean, specifically designed to help the local plants. We could make a mint selling it, plus, we'd ensure no pesky odour.
Or even better, what the dog simulates as leavings, could be bird food or some such! Each packaged drop, would feed the local pigeons, self-cleanup!
And dog treats! We'd have them beg for treats, but their innards will only accept treats made, and licensed specifically for the dog. In fact, without our specific dog food, the animal will "wither" and die!
We'll make a killing!
Johnson, get the design team in here pronto!
(Applies to YC, 12 months later 'mieses' sees such creations in Walmart)
NOTE: the above was a Google project, but once it hit the shelves, and with record breaking sales, Google cancelled it for inexplicable reasons.