Legal or illegal, its funny the police never made him shut it down or pushed the issue. Oh well....

As to the other points, I have gone the dog/fenced area route in both a neighborhood setting and in a very rural area. Based on what the op said (no mention of kids, etc iirc) this could be much more cost effective, imho. But like I said, it takes training. Ultimately a system is the final line of defense. But they are riddled with their own set of issues depending on the system. So nothing in the way of protection is fool proof. Like another poster said, its always best to take away their lures-keep all your toys and valuables out of vehicles left parked outside. But to each his own. All I know is what has always worked for me, and this is the first residence (in 35 yrs) we have owned with an alarm system in it (central alarm), and the only reason we have it is because it was here when we bought the house.