Yes, dressage is the hardest thing to do on a horse. Yes, dressage horses are the most balanced in the way they move. The problem is, the horse doesn't know either of those things. All they know is that they are being made to spend a lot of energy doing things they don't normally do and probably can't understand the purpose of.
Now I don't think any of that means we shouldn't do dressage. But it does mean we have to be very careful and patient with the training - and that used to be exactly what dressage was about. But now because of competitive pressures, that ethic is eroding. If dressage riders (as a whole) still really had their horses' best interests at heart, could Rollkur have gotten as far as it has? Would we be hearing about trainers using hot wire to teach piaffe?
Now those of you who are dressage riders might be saying "well I don't use either of those methods," and that's fair enough. I am just pointing out that competitive pressures have a way of pushing back the boundaries of what is considered good training or even humane. When you're asking as much of your horse as you do in dressage, that's a real concern.
The horses that have been doing dressage the longest, and thus the ones that do it the most naturally, are andalusians and their close relatives (of which the lipizzanner is one). Warmbloods only became popular for dressage because competitive dressage started in Germany where warmbloods are common. The most popular choice isn't always the best. Not that I hate warmbloods, but this is important for two reasons: 1) When you pick the horse with the most natural talent, you can use gentler training methods and equipment and 2) the longer a horse has been bred to do a certain thing, the happier they will be doing it.
There seems to be an attitude among riders (and it can be a problem in all disciplines) that tackling hard cases - horses that don't do what we want them to do very easily, either because of talent or temperament - makes one a better rider and is something to be proud of. But our horses would be much happier if we took the path of least resistance and did with them what they do most naturally.
The bottom line really is that dressage was not meant to be a competitive sport, and it's being ruined because of it. ALL disciplines have the potential to be inhumane if the people doing them get caught up in competition. I fear that dressage riders are losing sight of what the discipline is really supposed to be about, yet because of the noble reputation dressage has many of them don't think twice about whether what they're doing is really good for their horses.