I would think that the reasoning behind creating the characters as dogs is because of their popularityas pets. The point of a cartoon is to create amusement. So it is logical to assume maybe Disney tthought people would react well to them for that reason. Or it could be that Walt Disney was a dog lover perhaps. Whichever, they were both popular cartoon characters.
One of the defining points of whether or not a creature is a dog is how many legs it walks around on. Pluto would be a dog, since he walks about on four legs, whereas Goofy walks upright, and on two legs. I would classify Goofy as more of a caricature of a dog than an actual dog.