At the post-secondary institution where I work, we have a few students who have small dogs as service dogs. Not emotional support dogs, but legitimate service dogs. One is a seizure alert dog. I don't think it is fair to assume all small dogs are fluffy pets. One also can't say that there is no time where a legitimate service dog would not be in its owners lap or with another person. The one student doesn't have the use of arms or legs, and is in a motorized wheelchair. His small dog is on a leash that clips to his belt and sits in his lap, especially inside the building where halls are so crowded there is fear of the dog being trampled. Outside the dog will walk alongside the chair. On occasion the student's human EA will hold the leash and give the potty command to the dog (it all depends on how crowded the quad is). This does not negate the dog's legitimate purpose. The seizure alert dog is a very well behaved small dog, quiet and serious. I do not know if this person would ever want to take a cruise, but if he did (and good for him if he did, cruising is such a lovely time) he'd need to bring his dog and would be well within his right to do so. Further, I imagine in crowded areas he might have the dog on his lap, or in the care of a support person at times. And this would not negate the dog's legitimate purpose either.
My small dogs are terrors. They are well educated, thanks to training courses, but use their powers for evil instead of good. My big dogs are clever yet clumsy oafs. I love them all regardless, they do make me happy, and I miss them horribly when I'm away from them, but I'd be the first person jumping overboard the ship if I had to bring them with me. There is a world of difference between a service dog and non-service dogs (or disservice dogs, as mine would have to be called). But I don't think you can so easily say small dogs cannot be service dogs, or say that legitimate service dogs are never on their owners' laps or in the care of someone else.