It is absolutely not good for the environment. Your dog does not eat a local, natural diet. There are more dogs than could be locally and naturally sustained.
That blows my mind. I had two dogs as a kid, and if we didn't pick up the poop fast it destroyed the grass underneath. Their corner of the yard was all dead grass.
Sorry, misspoke. I meant any animal that eats meat, including humans, dogs, chickens, etc. If they eat meat, there are toxins in the poop that make it inappropriate as a fertilizer, but you can compost it and kill off most of the bad stuff.
Plus dog poop is ecologically good for the environment and fertilizes nature.