i am a spinner and weaver, but haven't played much with dog fur, since i think it feels gross and smells. however, i'm sure you *could* stuff some gear with it and it *would* insulate- all that's needed for insulation is to trap air. however, i doubt it would perform well. i think it would be prone to shifting and matting. then you loose the insulating properties of your garment/bag. one reason to blend dog fur with wool is to get the crimp of the wool (wavy structure) into your project. dog fur alone doesn't work well, since it usually doesn't have a good crimp to hold the fibers together, and will just pull apart.
in old-times, quilts were "stuffed" with cotton or wool batting. these days it's all synthetic.