it's because drugs are illegal. Therefor all trasactions must be paid in cash. No dealer takes Visa. Since Billions of dollars are traded in drug transactions, nearly 100% of paper cash has been in close proximiy of drugs at some time and the scent the dogs pick up ono rubs off.
So the police have probable cause to stop and search anyone whose money was once used by a dealer, since dogs and maybe electronics can sense dope residue on the bills you just got from the money machine. If this is truly "nearly 100%", that means me, and you.
And if they decide you have "too much" cash, they take it, because who else but a dope kingpin carries more than a kilobuck, and besides it smells like dope, and dope is illegal. You can hire a lawyer and sue to get it back after a few years, so what's the big deal?
And if the dog just likes the smell of money, so much better for the police, since they can now justify their actions based on the behaviour of an animal they trained.
I see how it all fits.