This is animal cruelty. Someone should report whatever idiot did this. That poor, poor poodle. How embarrassing. My standard poodle would never have stood for that humiliation.
I don't think it's animal cruelty if the dog isn't harmed by the dye. After all, you can shave all the hair off and let it grow back naturally after whatever it is that calls for a neon poodle.
Besides, there are people who do this kind of thing for a living... I've seen a couple shows on it on Animal Planet here and there. Odd, yes, but IMO (and I'm a HUGE dog-rights advocate) as long as the dog isn't harmed physically and emotionally (i.e. like the emotional scars that come from being raised in a puppy mill or chained to a tree for 10 years) it's something that doesn't hugely bother me. There's worse out there... far worse.
And yes, it could have been done (and done well, because I can't tell and I Photoshop for a living) on the computer.
Edit: AHHH!! Sorry for the thread hijack!! And now back to your regularly scheduled programming. Brought to you by Technicolor.
Edit to move my edit, LOL!