Maybe they had a problem with the German Shepherds being overly protective of their masters with other US personnel. I doubt they want the dog to attack the enemy.
I recall reading that in WWII, dogs who were family pets were borrowed by the military to serve in the war, then, if they survived, returned to the family at the end of their service. I often wondered how these canine veterans readjusted to civilian life. There’s a good story in there somewhere, kind of the dog’s version of “The Best Years of Our Lives”.