Hunting is indeed a natural instinct. It’s also natural for dogs to hunt cats, but we don’t let them do it! Pet cats hunt for stimulation, and there are lots of alternative ways to meet that need. Both animals have been domesticated for thousands of years, and are closely tied to their human guardians. They’re pets, not wild animals. They live where we live, and so are heavily concentrated in cities. If we let our cats roam freely, we are exposing them to serious danger, and local wildlife to a very high density of cats.