Ok, I've just read through this whole thread and I'm so happy that Dexter is happily settled in your home. I regularly rescue and foster too, so I am familiar with the issues of untrained, somewhat wild dogs. And kudos to you for handling the situation so superbly!
I have to agree with the OP, while my yorkies are my babies, they are firmly trained too. Just because they are small dogs doesn't mean that they can't cause big damage if they aren't trained. And a lot of the problems we have with yorkies, like housetraining, are a result of ignoring these issues.
Anyway, I say let dogs be dogs
They love having a pack leader and knowing where they stand. And they blossom under loving care and firm boundaries, just like human children.