Sure, it's a nice mechanic at first, adds flavor to the class, but I really like this suggestion by Killernuts (*cough*) of Arthas-H: remove happiness once your pet reaches the top loyalty level. After a while it just becomes a pain; at best I click an AddOn button every once in a while when the alert pops up, and at worst I have to take a break from what I'm doing to scrounge up some food. Or instead of removing it based on pet level, how about based on player level? Make a trainable skill at, say, 30 that keeps pets happy. You can use food to boost their happiness faster (useful with a newly-trained pet), but you don't have to.
At least one nice change is already slated for the pet feeding department: pets will be able to be fed in combat "at some point in a future patch" (Nethaera). So I guess that's nice, since indeed it does suck to lose what can be a significant portion of your damage just because you haven't been obsessively monitoring that little smiley face. Prior to 2.3 it was possible to feign death and then feed one's pet, but this has been "fixed".