I think part of it is that a lot of small dogs aren't actually trained to go only outside. Many people on here use pads only, and many more train their dogs to go outside but then allow them to use pads as well. This teaches the dogs that it's OK to go inside and some take that to mean wherever they please.
Loki was neutered when he was 6 months old, doesn't lift (well he tries at the mailbox, it's pretty funny) and goes outside only. He does mark outside (we stop in every yard to pee....) We don't have any issues with him marking in the house. A rare accident would be in front of the door if we didn't let him out in time.
I also think that people allow it because the messes are small. Could you imagine trying to belly band a big dog? It takes longer to house train small dogs so people give up and give in. I know Terriers are strong willed, but there are a lot of different sized Terriers and we all know Yorkies are special but not so special that I allow them to pee in my house
