Ericka,
If I found myself in the same situation, I cannot say I wouldn't have done the same thing. Yes, while it only continues the cycle, the poor puppy is not the one to blame. Given the alternative of the life that he would have possibly faced with those 20 year olds, I think following your heart was what was best for you.
In my opinion, those 20 year olds would have tired of the puppy once they realized the effort that it would have taken to take care of him and then what kind of life would that tiny baby would have? It would almost certainly have wound up very badly for the puppy.
Congrats, I wish you well with Kobe's new little brother. Have you thought of any names yet? "Chance" comes to mind to me.