I'm more fond of using it on Dire animals, myself, primarily because they get monk-saves. That, and non-dispellable flying, all day, at 4th (Dire Bat), is really neat. Underground, the ability to leave behind a useable tunnel (Dire Badger) is also really neat.
And as Reduce Animal is a druid-2 spell, lasting hours/level, you can shrink them down to reasonable size readily enough.
Letting Natural Spell work for them, though is... well...
At 7th, you can have:
A Wolf with 4 bonus HD (bringing it to 6), +4 natural armor, +2 Str/Dex, some tricks, Evasion and Devotion; giving it an AC of 17, Bite +15 for 1d6+2, and 39 HP (average)
Or a Dire Wolf with 0 bonus HD (6 total), AC 14, bite +11 for 1d8+10, and 45 HP.
If you let natural Bond work for such, that Dire Wolf now has 2 bonus HD (8 total), AC 17, Bite +14 for 1d8+12, and 60 HP. At 7th, no buffs, no items.
My 3.0 DMG has the NPC Fighter-7 at AC 22, bastard sword +12/+7 for 1d10+6, and 57 HP (with equipment). And the Dire Wolf will have better saves, and Evasion.... if you allow Natural Bond to work that way, that is.
So yes, he could easily seem to out-pace the Fighter for some levels if you permit Natural Bond to cover the Level Adjustment for the stronger animal companions, or if you put equipment on your animal companion.