Ah, I see where you are coming from. I was speaking purely from the perspective of handling the genitals in some way during AI, not using masturbation as the sole method of collecting semen. Certainly, the old fashioned method of Crumping a stallion for semen collection isn't as effective as using a teaser mare and an AV, but it's still used in some practices. Dogs seem to produce a better ejaculate when appropriately massaged behind the glans; better in the sense that the sperm-rich fraction is ejected more thoroughly before thinning out, though I know some vets like to mix the second and third fractions in the belief that it actually helps preserve the semen better during cryo. Never really believed that myself.
Still, back on topic: Masturbating a dog in and of itself isn't harmful. Period. To call this "animal cruelty" is ridiculous.