The really annoying part of this is I have never known of anyone getting their dog back because it was picked up and the license tag was used to identify and contact the owner.
Tags can be important. San Luis Obispo County is to the west of Kern County and is a rabies county. When I was bitten by a dog the police were able to determine that the dog had had proper rabies shots from the tags. If they had not been able to do so, I would have faced rabies shots as a default.
On another occasion, my father's (diabetic) dog got off her leash and ran away and he was able to have her returned because of her tags.
So there are two examples of the usefulness of dog tags in that part of California for you.