I think putting it in it's own separate column is a good idea. I don't think there is anything wrong with it, but I think some people may have felt that it somehow diminished the obituaries for people by having a cat along side them (I don't agree.)
Our local humane society has a monthly magazine that prints the animal obituaries every month. I was considering taking one out for a friend of mine who just lost her cat.
I like the idea of the separate pet obituary section, and I'm sure it will generate income for the newspaper. I wouldn't have been disturbed by the obit described in the article, though I imagine people who don't have pets just might be "insulted" by it sharing space with their family member's death notice.
The newspaper my dad works for published a dog's obituary once. But the paper thought too many people might get offended if a dog's obituary was included with the ones for people...so it was published in a separate section of the paper, and the dog's owner did have to pay for it.