At the risk of being unpopular, I do think it's funny.
It is sad that the dog suffers from age-related illnesses. But as far as the ugly dog contest goes, I see the humor in that.
I have an old dog (who doesn't live with me anymore, but that's a long story) whose nicknames include "ugly", "stinky", "dummy" (along with the less offensive "scruffy", "old man", "dog" and many more).
After years of calling him that, I have yet to see him offended by any of this. Human beings might be offended by words but dogs aren't.
Plus no mather how ugly, stinky and dumb my dog is, I still love him!