I had never used a crate with a dog until I got my first boxer. Wow, what a difference. We use a metal crate. It was initially used for times we were not home, house-breaking and bed-time (until house-breaking was finished). The theory as I've always understood it is that the crate gives the dog a safe place, a 'den' to go to. Indy is our 3rd boxer. Each of ours has loved his crate. Rocky, Rascal and now Indy, all their crates as their favorite place to sleep at night, as well as a frequent place to nap during the day. While raising our children, the crate was completely off limits to the kids. If the dog was in there, it was time to completely leave him alone until he chose to come out. In that way, the dog could go somewhere to get a break from a houseful of insanity! It was good for the dogs as well as the kids.
The crate is terrific for house-breaking because most dogs do not want to 'dirty' the place where they sleep. Keep the crate not much bigger than the puppy needs to turn around. So, if you potty outside prior to sleep time, put your pup into their crate to sleep, and then outide again immediately when he wakes up, it really helps with house-breaking.
We have always made the crate a positive place for our dogs to be. Even when they first came home. Warm, soft blanket. Treats in there. Just a happy place. We never scold a pup and then put him in. Even when it's used as a time-out spot, for instance, Indy was a big time barker for a while. If he didn't want to stop when told or be redirected, we would simply tell him to 'go to his room'. He would quietly go into his crate. He would lay down there and wait until he was called back out. Sometimes 2 minutes, sometimes longer. The benefits are many. We also have asked Indy or our past dogs to go to their rooms when we had house guests that weren't comfortable with dogs. Since our dogs were crate trained and LIKED their crates, they would simply go and stay there until called out.
Many people do crate their dogs whenever they cannot be home to supervise their dog. For a dog that has a hard time staying out of mischief or suffers from seperation anxiety they are truly life-savers. For both dog and owner.
Sorry, I went on and on. Hope this helped to explain a little. The crate is not a cruel thing at all, and truly once past house-breaking many dogs generally use theirs when they choose, but they really like them.