Our dog is in an indoor kennel. He has enough room to turn around, he can stand up, but that's about it. Sure, I would like to let him in an outdoor kennel but there is no way I am keeping him outside in our neighborhood. Our neighbors have had their dogs stolen and another neighbors dog was poisoned.
I have experience with dogs, I used to work with the large dogs at a no kill shelter, and have found that keeping them in an indoor "crate" if you will, as long as they can turn around and stand up, is the best option for a dog with potty problems. He does not hate his kennel in fact if he gets scared that is the first place he will run to. I used the kennel for my other dog, and eventually she no longer needed it. I hope this to be the case with him as well.
My dog is let out of his kennel as soon as we get home and he gets plenty of exercise. Here is a pic of my puppies...you can tell that they are both very healthy...