I agree with you that it does leave a lot of back yard breeders (you know, the stereo-typed ones that really suck, not the small time people who actually breed in their back yards, so please, don't jump on me for saying that) but the thing is, the responsible breeders are still having foals that are still worth a lot. So I don't think that they should stop breeding all together.
There seems to be two categories of horses being bred: the expensive, top quality performance horses, and then the "average" horse, registered or not.
The "average" horses are what need to be stopped being bred. So you could have a completely responsible breeder only breeding one fairly well built, well bred horse a year that is going to be sold to the average rider. Those and the lesser horses are what I feel should not be bred anymore.
It would help if the mindset of "I don't need the best of the best for just trail riding/whatever lower-end division" was lost. And I know there are arguments about those who can't afford the best of the best horses. But supply and demand laws will come into play, sure it wont be next year, or even the next 5 years before the prices drop on the best of the best horses, but after that adjustment period there will be much better bred/conformed horses for the price of the "average" horse now days.
That's my opinion I guess. I also totally think that BYBs will jump on the best of the best horse band wagon as soon as the settling mind set is lost. They are out to make a buck after all.