My main issue with breeding is the risk of making horses that are sick. Animals that carry illnesses or/and conformation problems. That's an issue that will happen regardless of the breeding even at the higher end of the spectrum with registered horses. The ones that are purebreds and considered to be "better than everything else".
The mare I just bought has a lot of conformation faults. Her bloodlines all come from the Budweiser Clydesdales. Would I breed her? No. To me she is my treasure and my soul but I don't consider her as good enough to bring another unfortunate foal into this world.
I also have a Clyde/Qh cross. Her conformation is far better than the new filly I own. Her temper is 10 times of any horse I have ever met or known. If I were (ridiculous enough) to breed another mix match like her over a purebred of something else I would have another foal like her again.
A horse is a horse and whether or not people want to admit it, you have very sick animals being born every day regardless of whether or not they are purebred, registered etc.
I think the better horses out there are the ones that are bred with mixes as they become what people consider to be safer than a lot of the hot lines others will breed.