In Cambridge Dictionary, The Free Dictionary, Merriam Webster, dictionary.com and The Britannica Dictionary, none say that 'watchdog', under the definition quoted below, is derogatory or disapproving.
watchdog: a person or organization responsible for making certain that companies obey particular standards and do not act illegally
But the objectification here, comparing those people or organisations to a dog, make me feel like it's derogatory. To me, it sounds like a word you would probably use to refer to Gestapo or the like. Does a native speaker have this feeling too?