My brother's family has a 5 lb. Yorkie. He is very cute, but fragile. He makes me nervous because he could get stepped on so easily. My dog is 9 lbs and looks like a giant next to him.
I think a lot of people who have small dogs and carry them around like babies are trying to replace a child. It's either the child they never had or their children are grown up and moved out. I have seen people push them in strollers around town. The person is walking and the dogs are going for a ride.
I agree that all dogs need exercise. I'm not so sure it's good for them to be cramped up in a bag or carried in one of those baby slights that you wear over your chest.