I think that paper training is an easier step towards teaching your dog to go outside. Puppies need to go out a lot, paper training is great for all those times that they don't make it out.
It also teaches the pup that there are place where "going" is acceptable and places where it is not. After the pup is paper trained (I did it with both of my dogs) it's a heck of a lot easier to teach them to go outside. Think of it as a "transitional stage".
My girl did that too. She would poop about a foot from the paper. I don't really know if this is why, but this is what I told myself.lol
She was about 6 months old, and getting bigger. The paper was on a linoleum floor. I think when they squat to go poop the paper slips and it's very uncomfortable, so they know their supposed to go on the paper but it's uncomfortable so they try to negotiate by going as close to the paper as possible. I never got her out of the habit, but she did get to the age where she could hold her poop long enough to go outside. I'm sorry I don't have any suggestions as to FIX the problem but I HAVE experienced it as well and that's the explaination I came up with.