I've heard it a few times... but most of the time, it's in total joking manner by family members so I don't take too much offense to it.
But it does amuse me. Our lawyer and family friend has two Boxers who has pulled the "my dog could eat yours" crap and these two dogs just stay in the house and in their backyard 24/7. Yet my "non real dog" spends his days hiking, running, swimming, doing everything a "big dog" should be doing. He's much more of a real dog than his dogs