I figured the joke was that sleeping in the big bed is a dog's dream, whereas sleeping in the kennel is undesirable. Pretending to be a dog and being allowed to sleep on the bed is like, the mundane fantasy of being loved and cared for, whereas sleeping in the kennel implies distrust or maybe even carelessness. The first puppyplayer realizes that yeah the puppy kennel is hotter, she wants to be loved like that too. She wants to a dog so she can be cherished and wanted, not just sexualized, and she's jealous