Just as an extra tiny obstacle in the path of the bad guys, I always take the kill switch clip with me when I leave the dinghy at the dock. Somebody could always tow it away, but it's all about making your dinghy a bit harder to take or less interesting than the one next to it.
There are all kinds of creative things you can do to make an outboard un-friendly to a stranger. Something like reversing the fuel hose. Unlikely to ever be noticed by someone trying to make a quick getaway, but the engine will only run for a few minutes on the fuel in the carb, then stop and not restart.
We use a cable lock, mostly because the attachment to the hull is the weak point and don't really expect chain would add a lot to a deterrent. The cable lock we use is from Seattle Sports, sold as a kayak lock. It is long and adjustable with an integrated lock. So far, at least, it has been holding up in the salt water--always tough for any lock.