I have seen small dogs in the cabin on domestic flights in France. It's always been on small aircraft - no more than 40 seats. That's not to say it doesn't occur on larger planes there - I've just never seen it.

Taking pets on international flights probably has more to do with customs regulations than anything else. Small isolated countries, like the British Isles, are terrified of rabies infestations and require lengthy periods of quarentine for incoming pets.