I'm an out and out, unrepentant dog lover - but you're right to be upset, and they're wrong to treat the animal the way they do. (As in leaving it unrestrained and untrained.) In my view, by not training their dog to interact appropriately with other humans in a human world, they're doing "animal cruelty" themselves.
What you're seeing is a territorial dominance behavior, and it is potentially dangerous. Each time someone rides through the area, to the dog it looks as if it has successfully threatened and chased off a challenger. Since this dog has not learned to defer to humans, if challenged too much it could become violent.
At the minimum I'd call animal control each time it happens. Make a cell phone video when possible, again each time. If the video is dramatic enough, and if you "play" the report right (Gosh, officer, I love a dog as much as anyone, but this guy is really scary. I'd hate to think what might happen to some poor old lady who can't walk fast enough to be safe...), the problem should be solved promptly.
A hundred years ago, they actually sold "bicycle guns" which were sub- Saturday night special pistols for dealing with dogs like this. Now, you would be hung out to dry unless you could show you had severe bodily harm.
I'm with Silmaril on this, I'm an absolute dog lover, but I don't care at all for many of the owners. That is plain and simple negligent ownership. The owner is as responsible to the dog as the dog is to the owner, and just letting it run wild is setting it up to be killed, by accident or by law.
However, I have the solution to your problem. Cold Steel makes them, they're non lethal and legal everywhere, very light and easy to carry, even on a bike (you could pretty easily rig something where you had quick easy access but didn't have to actually carry it in your hand), and it probably the most painful thing anyone could experience being hit by. It's called a Sjambok, you can get them and have them shipped to you for about 20 bucks total, and they're nigh indestructible. http://www.amazon.com/Cold-Steel-Sjambok-42-Black/dp/B001NQ1WDE
Look them up and read about them a bit, they're you answer for sure. I'd get the 36 inch one for your needs. Here's a little bit of info to get you started.
http://www.righteouswarriortemple.org/New%20Folder/sjmbk.htmOne of my best friends was messing around a few weeks ago and got accidentally hit in the shoulder by a near full strength swing. He fell to his knees and actually cried. It bruised his entire arm/shoulder area for 3 weeks, but they are non lethal. Exactly what you need.