You definitely made the right decision. Sounds to me like your head is on straight and you are someone that I would share the woods with. To answer you question, No I would not have taken the shot. Feel good about your decision. You made the right one.
I agree with this 100%. Although it is tempting,you made the right decision on not shooting the dogs also. You don't needa dog running home with an arrow hanging out of him. Good Job!! I would find out who owns the dogs and let them know.