Well, they either will be offended or they will go for the idea. It's all how you word it.
I would go over and just say how much your kids love the dog, enjoying playing with him, maybe talk about the fence (definitely have to board that up), and see what their position is regarding the dog.
If they hint that it's more work than the expected, then that would be an opportunity to make the suggestion. But if they say how much they love the dog, etc. I wouldn't.
My mother inherited my sister's dog. My mom took wonderful care of the pup, but it was more active a breed than she would have looked for at her age. A lady saw my mom walk the dog every day and absolutely loved it. Came out every day just to pet it. So my mom asked if she would be interested in having her - worked out very well.
So it's all how you word it. You just don't want to put them off (by insinuating they aren't caring for it enough).
Might as well ask :) Good luck!