wow, i've had a comment to almost all of the replies you've gotten so far. first off it seems like your question is more of how to go about letting people meet your dog, rather than if you should or shouldnt right?
i think what you're doing is okay, just adding on that you should always let the dog approach the person. if its a situation that makes you cautious or nervous, then play it safe and say no because dogs can sense our tension.
i wanted to ask shiloh's mom if maybe she takes that stand because her dogs are rescues? (i'm not sure if they are or arent). both of mine are and i feel as comfortable with them as i have with dogs that i raised from puppyhood... just thought i'd ask.
that said, 9 times out of 10 i allow my dogs to be petted. the only times i dont is if i have both out at the same time and its hard for me to control them* OR if gia is way too excited and going bonkers. she adores kids (kids = toys) but will easily step on a foot or give the kid a nose to the eye or something, so i'm a little more cautious.
i always thank people for asking (because i appreciate it and also to validate them) and i always let my dog approach them by saying "is that your friend" or "go say hi". if i dont say one or the other, i expect them to remain at my side.
*quick story of how brainless some folks are - i was walking up to my house with both dogs on leash in one hand, groceries in another hand, and balancing my cell phone on my shoulder (no, i'm no the brainless one that i speak of, lol) and a woman came up to me with two kids about 2 and 5 asking if they could pet the dogs. i was so surprised that she asked i couldnt help but be a touch rude and asked "are you kidding right now?". she seemed a little embarassed and just sort of walked away saying "ya i thought maybe it wasnt a good time". i'm still shocked and would like an answer!!!!!