As I wrote my response I thought it might be useful to put it in a blog post for others to read. I've had quite a bit of experience with people wanting to rescue Molossers to give them a 'better' life as a guard dog for their premises...
"With regards to keeping dogs as guard dogs, we generally strongly recommend against this now. It’s actually not strictly legal anyway, as a dog cannot be kept as a ‘guard dog’ unless some pretty stringent measures are put into place such as warning notices all over the place and the dog being supervised by a handler at all times.
Tethering of dogs makes them extremely frustrated (this is a massive problem in the U.S.) and this can lead to aggression.
In my experience dogs (whatever size or disposition they are) would prefer not to be left to their own devices to guard territory. They need to know that it isn't THEIR job to make critical decisions about who they let in and who they don’t. They need to work with a handler to make those decisions for them. Even if they are not expected to actually attack anybody and just raise the alarm, this won’t stop the stress related to having that responsibility on their shoulders unless very specific training is instilled such as I've taught my dogs; one or two barks then run back into the house and find me so I can reward them with a treat. Most pet owners will not be able to put this training in and keep it in place.
Dogs that work ‘alone’ make all the wrong decisions - usually using their teeth - and end up being very unstable characters who generalise their instability around animate stimuli even when they are taken ‘off duty’ for a walk with their owner. They usually lead miserable lives never quite knowing when they are on or off duty and never being able to fully relax.
I think that in truly rural areas this isn't really a problem as people, as you say, live differently and almost expect visitors to understand that there are loose dogs roaming around and the dogs generally have more space to 'escape' if they feel they need to. This is very different in busier towns and cities though, where dogs are subjected to far more ‘threats’ and probably never get a chance to ‘switch off’, leading to long-term problems with cortisol build-up due to prolonged stress etc.
Living outside is a purely an individual decision based on the individual dog. I've known many dogs who prefer to live outside and only visit indoors now and again. These guys tend to be quite independent, aloof characters and not ideal family pets though. They are loyal to a point but personally speaking, I think they will always be ‘their own masters’ because due to the emotional detachment needed to live separately from the human social group, they’re not emotionally invested in their humans.
A part of me can’t help feeling there’s something sad about that, but as we have to tell people every day - dogs are as individual as we are and may not always be people-orientated. Like some humans!