marking their territory with scent.

They saw the sign posted: Fine for Peeing.

Because it's in their nature to mark their territory with urine.
Normally, wild dogs would pee on trees, rocks, etc. to stake their territorial claim, but when there are none of those to be found, a fire hydrant will do just fine.

Because they are not allowed to use the toilet.

They want to let the other dogs know: "This is my fire hydrant!"

Because they're there. It's only the boy dogs. That testasterone thing. I think they want it for their own private calling card showing that they've been there.

Dogs will relieve themselves on any vertical surface. The hydrant has just become iconic because it's a common urban object and likely more observed.

Dogs do not seak out a hydrant to pee on as we humans seek out a washroom. It is because people generally walk their dogs on a side walk. Since fire hydrants are usually next to the sidewalk, it is the closest upright object availible to them. Once one dog pees on something, all the other dogs have to pee on it to. This is their way of saying, this is my walking path, not yours. So all you dog owners don't let your dog pee on a hydrant! A firefighter might have to use it to put out a fire! Would you want to touch that? Train your dog to pee on telephone poles, that's what they are for!

nub

territory pissings