I think dogs confuse people....you can, in fact, breed the smallest dog to the largest (please make the small one the male or you risk killing the female--someone hold that chihuahua boy up to that Newfoundland lassy). But dogs are all one species. They just look really different. Chameleons are different species but look quite similar.
{insert joke about Intelligent Design here}
Breeding a carpet to a panther would be like breeding a dog to a raccoon...probably not fun for the female and definitely not productive.