The actual name is Acral Lick Granuloma. They are extremely difficult to control and even when eliminated in one area the patient can start a new one in a new place. A combination of many medications plus diligent use of an e-collar is usually warranted.
A skin scraping, fungal assay and/or even a skin biopsy should be performed to determine if there is a parasitic or infectious cause or if there is an underlying skin mass that is bothering the patient. If these are negative than Atopy (itchy skin allergies), food allergies or behavioral causes should be addressed.
Treatments can include anti-histamines, steroids, topical medications to deter licking, and to treat the lesion, antibiotics if there is a secondary skin infection, behavioral medications to treat anxiety or obsessive/compulsive types of behavior, acupuncture and Chinese herbal Medicine, such as Qing Ying Tang (and others), and even therapeutic lasers.
Occasionally, they are easily treated with an e-collar and a lick deterrent such as topical bitter apple.
Please let me know if I can help you further.
I would get another vet. To wait until you have an infection is ludicrous.
These "lickomas" can be healed easily, and think of the aggravation your dog has having something itching etc. all the time.
My dogs have had them, and Genticin spray will heal them almost overnight.