if you're towing someone that just broke down, going to rent a dolly isn't the best option. and if you're only towing it a mile or two, it still isn't. especially on weekends, when the rental places are often sold out.
i've helped tow cars short distances, and as long as you keep it sane (slow speeds, OFF the highways, etc) it's perfectly safe and 100% legal. it works better with similar sized vehicles, since the car in the back has to do more braking to keep the rope/chain tight.
i view it no differently than someone with a stretch strap helping pull someone out of a ditch instead of calling a "proper" tow truck and paying their fees.