I would not have given up my seat either. What I also don't understand (besides why there was a 50 lb dog at the gate) is why the GA selected you, offered you a middle seat in E-, and when you rightfully rejected it, she didn't try any other pax? I guess she really didn't want to deal with it, looked at the pax list and decided you were the least likely to accept, so she called you up just to show the dog owner that she tried something.
Was the dog owner seated next to you?