Yours is a fascinating perspective that I haven't considered before.

My "shooting from the hip" response is to consider the life of an animal in a 2x2 grid. The first column is pets, the second column is non-pets (i.e. Animals living in the wild). The first row is animals with sufficient access to food, shelter, and overall wellbeing. The second row is animals without those needs being met (i.e. Suffering under the hands of either humans or nature).

In my opinion, based on my personal life experience, and only if you consider the animals that are not typically used for food (that's an entirely different, but also important discussion), the number of animals in the top left quadrant are second only to the number of animals in the bottom right. Because of this, I believe that the concept of pet ownership is an overall net positive.

That still absolutely does rob the pet of the free will to decide their own destiny, and that is still absolutely a moral quandary.

Edit: Another way to frame my opinion that pets are a net positive is that we humans have done a great deal to improve our general quality of life (for better or worse to the world at large), and have mostly brought our pets up to a similar quality with us. Food, water, and shelter are usually provided to pets at a minimum, but those are anything but guaranteed in the wild. Pets lives also greatly improve compared to wild animals if you consider modern heating and cooling, pet friendly dietary considerations, veterinary care, and an overall pet friendly society.

I mean you can make the same argument for many humans, we as children don't choose where we are born and who are our parents. And each country and society will decide for them the "correct" way to live. If anything, you could say we are currently treating tiny humans as pets.