Good point, I'd also completely forgotten about the Yeth Hounds. That said you could argue that they'd be difficult for Nualia to field against Sandpoint. Their Bay affects everything except evil outsiders, so they can't be used in close coordination with the goblins, who are just as likely to be panicked by the Yeth Hounds if they are within the area of effect. Also, and this may have just been an oversight, Nualia doesn't share a common language with the Yeth Hounds, meaning involving them in any precise tactics is right out. Given that Nualia's plan is freeing Malfeshnikor you could infer that her conclusion is she can't employ them in this way, otherwise the presence of the Yeth Hounds is pretty fatal for Sandpoint. The average damage of Sandpoint's guards doesn't crack the Yeth Hounds DR though, and Sandpoint's magic users might not have adequately prepared spells/wands to drive them off.