I agree- I think it comes down to the specific breed as to the effect of breeding for conformation VS utility. I can only speak from my experience with Belgian Tervurens (and some exposure to Groen and Malinois). The breeders view themselves as guardians of the heritage of the working aspect of the dog. The vast majority of breeders I have encountered work very hard to maintain the best qualities of the breed- not just the conformation "looks". They strive for quality working, herding dogs that ALSO do well in the show ring- a well balanced dog.
To that end, they are very protective of their breed, make it hard to even get a puppy unless you agree not to breed. They have vigorous and active rescue orgs, they look out for "bad" breeders. The result is some exceptionally versatile dogs who excel in herding, agility, shutzhund and french ring, tracking, S&R, etc...and do well in the show ring.
This is obviously much easier to do with a relatively uncommon breed such as a Belgian- one only need look at the Golden Retriever or even the GSD to see what can happen. There is a lot of worry already about the Malinois and its growing popularity as a status breed and over focusing purely on protection work and the the spectre of unstable dogs.
This was the case with the breeder we got Albert from. It was similar to converting to Judaism-- we had to visit 3 times approx 4 hours each way before we were allowed to adopt. The first time we were there, the breeder had other breeders there to interview us as well. On site, she had four generations from 14 years on down and had others bring their dogs from the breeder over. After the show days were over, many of the dogs went on to field trials just for the hell of it. She did have the field training background, but the she said the dogs loved doing it. It was clear to me that the breeder truly loved the breed and wanted a well rounded dog.
Incidently, my dog's litter mate was showing at Westminster. She didn't make BOB though. The breeder to this day tells us she thinks she could have taken BOB if Albert wasn't Juan Pelota.