Should I stop this?

Ok doggie lovers out there, I need some advice.

My little snuggle-muffin has a sucking problem. Every night Bosley sucks on things to wind down and fall asleep. It's usually his teddy bear or squirrely, but more often than I would like, it's one of our pillows. Here is where you wrinkle your nose and think 'Really? She allows that?'. Well, I guess that's how I feel about it sometimes. It's fine when it's his toys and I really don't mind most of the time when it's my pillow because he's just so damn cute while he's doing it! He snorts a lot and gives what ever he's sucking on a huge hug. 

Now, while I agree that the pillow sucking is on the edge, I think there is a larger problem. He has been sucking on his paws since he was pretty young. It got so excessive that his skin on his paws was in pretty poor shape. Our vet recommended changing his diet to lamb and rice because of a potential food allergy. He's been on this diet for almost a year now and he's still sucking. I do believe that the food had something to do with it because he gets itchy all over if his diet gets broken, but it almost seems like its more of a behavioral issue now. We are constantly reprimanding him for sucking on his paws. He'll stop for a moment then start again. I've put olive oil on his pads thinking they were dry, we've given him omega fatty acid capsules, and made him wear a cone. I don't know how to get him to stop sucking his paws.

Am I encouraging him to suck on his paws by letting him suck on toys and pillows? Am I putting too much thought into this and am I just being a whackadoodle? Is the sucking on teddy before bed a good way to let him calm down and relax, making me cruel if I make him stop?

HELP! Let me know what you think.