I can tell you first hand, the horses at our barn would not pass without papers. Bloodlines in our field is what counts. These top-of-the-line name-branded colts come around a lot quicker, get soft quicker, and are more prepared quicker than some pup from some anti-register's pasture. You just can't get the equivalent of a good well-bred horse and a good grade horse without going lower-end on either's part. I understand, there are pukes in the registry too, even some bred well as the good ones. But your chances of getting a grade horse that will work as well, as easy, and be as talented as those that work well, easy, and talented of higher calibur, are SUPER slim.
I'm in no way saying that a good grade horse should be shunned, and some are perfect for some people that like them. And yes, you CAN get a good grade horse for less than a registered one, and yes, a good grade horse can be MUCH better than a not-so-good registered one. (even if it is really bred-up and professionally trained)
But I will tell you, IMHO, the natural talent the bred-up colts we've come in contact with just cannot be compared to. These horses are bred to do what they do, and they do it with ease.
My husband has started many a colt. Many, many. Racehorses, ranch horses, riding horses, roping horses, calf-horses, cow horses, and now cutting horses. None of those without proven parents have even amounted to anything remotely similar to those bred to do their job.