I have a friend who is a dog trainer. Her opinion is that small dogs develop these nasty dispositions because they are spoiled by their owners. Little dogs get carried around, coo'ed over, allowed on the furniture. If they growl at their owner, they don't get corrected, and they learn they can get away with that. I think my friend is right; people will put up with behavior from a toy dog that they would never tolerate from a larger breed. The owners don't take the aggression seriously enough to get training advice. But the end result of this lack of training is that eventually the family will get rid of the nasty little dog and if it goes to a shelter quite likely it will be euthanized. No shelter will re-home a dog that is not trustworthy, no matter how cute it is. And that is a shame, because the dog is not at fault. Really the owner has failed it.
If insurance companies knew half as much about dogs as they do about profits, they would base policy decisions on training and temperament of each individual dog. They'd be safer insuring most pit bulls than some of the small dogs we've handled here.