I believe there are different rules of dog engagement between the cities, the burbs, and the rural areas. I live in a suburban area, and I can say from experience that people who use their dogs as neighborhood bullies suck! I applaud your constraint. As much as I would have wanted to shoot the dog (and I would have if it continued and attacked me) I wouldn't have shot it while its owner was there to remove it. He might well have been armed, or come back later armed.
I am a utility worker in the Philadelphia area. Unfortunately, I am not allowed to carry on the job, so I have resorted to other means of dog protection (many aren't woth the price of ammo anyway). A little while back, I had an angry homeowner send their dog after me while I was disconnecting their service on a pole in their back yard. I very clearly informed the woman that when I cam down the pole, that if the dog was still there trying to get at me, I would kill it. She refused to bring it in. I used my attitude adjuster (2 pound lineman's hammer) to resolve the conflict with the dog. The next guy who climbs that pole will have a dog free work environment...