I have two dogs, one of which is a breed that was purpose bred by monks in Tibet to be an 'alarm dog' (Lhasa Apso) to call the bigger Mastiffs to deal with said intruders . basically, I think they bred all the courage out of them, so he barks at pretty well anything...imaginary or otherwise. It works really well, except like I said, he barks at any and everything.
I get to play the part of the Mastiff.
WOOOF! 
anyway, my point being, smaller dogs have their uses. you just have to be willing to be a mastiff.