I live in a small townhouse (no yard of my own) and I have two dogs, and they both do just fine. Berlin, my GSD, gets plenty of exercise but I make sure to take him on a walk/run daily, and give him a good hour or so of fetch on his training leash, and when he's inside, I have mental mind games for him like "find" and hes in obedience school. He loves his life, no complaints here!
And that bully comment is ridiculous! lol. If that were the case, my dog would be on an attacking spree because he's met many people (KIDS) who are scared...he's really just a big lover.