As demonstrated by artist Whatshisname, inspiration can come from anywhere. The design behind the Good Boy and Good Puppy lamps are fairly self-explanatory -- a dog squatting to do its business isn't exactly a rare sight.
The lamps were banned from the London’s Art Below exhibition because they were deemed as being too crude. It's not completely unfathomable to assume that some minds would find the Good Boy and Good Puppy lamps tasteless. However, according to Whatshisname, the lamps were created to stimulate an uncomfortable response in regards to an everyday activity.
Picking up after one's dog is often regarded as demeaning, gross and unpleasant. While these adjectives may apply, the fact of the matter remains that it is something dog owners deal with everyday and should be no more averse to it than they would be towards turning on a light switch.