I know of larger dogs, too, that have been removed from inside fenced yards and never seen again. A little Yorkie isn't much of a challenge. One of my own larger (but not huge...about mid-sized 50-70 lbs.) Shep/Labs was let out of our back fence while no one was home once. I found her wandering, but on the other side of a very busy highway. While I was 'navigating' her back across the highway using hand signals...too noisy for voice and she was very well trained for both, a Sheriff's Deputy stopped to verify she was my dog...which he could instantly see by her obedience and devotion once on my side of the road...
...and informed me that in the area we lived at the time, dogs were being taken and were being used in the Forest FOR TARGET PRACTICE!!!
People who have not had little dogs (or even cats) often do not realize the dangers to small dogs are very much different in many ways than dangers to larger dogs, and theft by people or as "prey" by wild critters is a huge concern to their owners. I am so sorry your friend was not aware of these sorts of dangers, but even more importantly, I am soooo glad you got there when you did and saved your baby from being stolen!
It would be so much worse for everyone if things had been different. The good thing that's come of that situation is that NOW you KNOW your neighboring children CANNOT BE TRUSTED!
And...I think that's just about the saddest thing ever.
{{{Hugs}}}