I found this really interesting, I honestly thought this might turn ugly lol, but most of us seem to agree.
I too would never hug a dog that wasn't mine, but i know Blackjack loves it as he will come and shove his head under my arm until its around him and then snuggle on my lap untill i wrap my arms around him. But in the future If i have a non-hugging dog then I wouldn't do it. I know that naturally dogs should find this as a dominating signal but I think that some learn young that we mean it as a sign of affection and therefore enjoy it. Just like we learnt somewhere down the line that a dog licking us means affection. We would never tolerate it from another person (imagine instead of a hug your bestie gave you a lick across the face.. eewww) but (some/most of us) learn to appreciate when our dogs give us a quick kiss.
I think the human dog relationship has become so strong in the last few thousand years because we (more so the dogs) have learnt to understand each other, even when we might display contradictory behaviors.