I grew up in farm country, and part of my childhood was on a hippie-commune farm. I have no issues when I eat meat from an animal I know was treated well. But like you, I've started to have a real hard time eating factory-farmed animals, and I've turned my focus toward a lot more fish and vegetarian options.
Mind you, I recently ate steak and hamburger from "Daisy" and "Duke" with great enjoyment. I knew both those cattle personally from the time they were calves, saw the huge pasture they had and the good fresh grass they grazed on, and saw the frankly buccolic life they lead until they were swiftly and humanely killed. That may sound gross and disgusting, but if I don't know personally how a food animal lived, I'm having a very difficult time feeling decent about eating it after it is dead. Pretending meat was never part of a living animal just isn't working for me these days.
Likewise dogs: if I don't know it was raised in a loving home and its mother was treated well, I'd have a very hard time buying it.
But I do have to wonder about the economic consequences of the situation of boycotting milk from dairy/puppy mill operations. If I'm running cows and puppies, and suddenly the market drops out of my cows; well, I'd be likely to push harder on my puppies.
Not an easy problem to solve. It may be that legal and societal pressure could be more effective than economic pressure. It's a tough one.

