I've got 3 dogs. (2 at my mom's and 1 at my dad's).
The 2 at my mom's do sleep in a cage and they don't mind. It's just for the night anyways.
At first it was also very helpful to put like newspaper in there so if they poo in the cage it will be removed easily.
The 1 at my dad's just sleeps on a cushion. This dog listens pretty good though and it never really slept in a cage.
It's just whatever you think is best for the dog. And it's not a proven fact wether it's bad or good for a dog

Every dog reacts different to a cage.
I think it wouldn't hurt
