I think your neighbors advice is very sound. I too have an affinity for dogs and am inclined to want to keep them around even if it isn't their best interest.
Dogs will espouse loyalty and love to the literal very end and it can hard to let go without feeling responsible.
It's my opinion that if something can be done to save the dog without making suffer for a longer amount of time then it's a good treatment.
If the dog lives longer but is in more pain, probably not. If subjecting a dog to chemo to squeeze a few more months of life out of him is the gist, probably not a good idea. He will just be sick and suffering for slightly longer.
I too hope that chemo gives him more years of health and happiness once he recovers though.