They do see it, but they don’t mistaken it for something real. The image on the screen has no smell, that means 70% of information about an object is missing in dog’s mind. Something that appears like an animal, but lacks smell of an animal, for a dog is as interesting as a rock 80 feet away. Except that they can still smell that rock.
Also we perceive video stream differently. The screen refresh rate, how many still images appear on the screen, is set for humans at 50 to 60 frames per second, just above the critical flicker fusion frequency that we see. Because dogs see 70 to 80 or more frames per second, the screen would appear jerky or worse.