We don't have a dog now, but I grew up with them. They always had free roam of the house, although we did close our bedroom doors at night. We did not have crates for them, although if I had a dog now, I would. I don't mind dogs being in bedrooms, but I don't like them sleeping on the beds. (Our cats do, though.)
I know several families with large dogs who keep them outside almost all the time. In one case, the dog comes into the mud room when it's very cold. The others have barns where the dogs can go in bad weather.