I think they can be great judges of characters, yes, but, I also don't think it's always spot on with every dog.
Sometimes a smell throws them off, or someone who is awkward but not dangerous, or they might be having an off day, or feel bad, or any number of things.
Case in point: My own son, who is what we suspect to be High Functioning Aspergers. He's also not a huge dog person, he's more of a cat person. Oh he likes dogs, and he'll play with ours. Other dogs though he doesn't flock to, and sometimes he's a little awkward and off putting without meaning to be, which can set some dogs off also.
So, yes, while I will listen to their judge of character on a person, I also listen to my own gut and look at the situation for what it is. Many times, people who have a bad feeling about someone because their dog does, would have that same feeling if the dog wasn't there. (not always of course)
Baily ~ GSD x ~ (Jan 2001 - Jan 2016)
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Buddy ~ Schnauzer X Jack Russell ~ 11yrs
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Carrot ~ Solid Black Cat DOB (est) 7/15/2015