The machines invented the matrix because humans would riot if the simulation was too perfect or too shitty, so instead it was made perfectly normal. The machines didn't care either way, they just wanted to prevent more random "wakeup" events that were caused when the world was unrealistic.

So we can't know what is good for a dog other than what they tell us. Dog is biting us or whining, we're probably doing the right thing. Sure, you can throw in a bit of human empathy to account for the fact that we cuddle and pet our dogs, but we still know what they like based on what they're telling us.

In the beginning perhaps humans used dogs in an exploitative way, but many of the relationships now are mutual. Most dogs owners I know treat their dog as if it were "man's best friend", and they generally seem to reciprocate. The machines in the matrix wanted us for our value as a resource not for companionship and they certainly didn't respect us.

I think exploitation and benevolence are opposed if not mutually exclusive.