I am so sorry to hear that. Well a Sheltie can have smooth pink pads. Its normal but if you are that much sure that it shouldn't be like this then it seems to be some skin disease there. It has nothing to do with its liver failure. But still I don't consider it a disease. In fact I have seen a sheltie puppy recently having smooth pink pads and it was beautiful and perfectly all right. It seems normal to me. And it seems as if your vet had only doubts about some disease. He was not sure about it. Moreover, you should know that it didn't die because of its pink pads at least.