I see this all the time! Just yesterday I was searching Amazon for "'booster seats" for two of my children, and mixed in with all of the child safety seats were pet seats.
The same goes with strollers. If you look for a baby stroller long enough, you will come across a stroller for a pet. :-)
I think that it's fine. For people who need (and like) the companionship, having a dog or a cat can really be a wonderful thing. If they want to treat their pets like children, that's their prerogative - especially for those folks who don't have kids.