It's a pure utilitarian calculation. These animals are better off dead than alive. There isn't the natural habitat, or resources to care for them. Better to end their suffering quickly and painlessly.
If we could ask the dog "death now, or try your luck on the street?" I assume it would choose the latter. Being a street dog is a hard life, but it's not all suffering. We kill the dogs because letting them roam free is an inconvenience to us. It's not an easy problem to solve, hence all the urging to neuter and spay.
If they're going to end up in the street, why not let bad owners dump there directly and save effort? What could go wrong with letting loose a few dozens of stray dogs each week, right?
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