Do you actually, personally know legitimate breeders that do this?
Something disheartening that I learned was that breeders will often not reduce the price of their horses but prefer to send them to auction knowing their likely destination. This is done to prop up false values.
This is just not true. I am a breeder. I know many serious breeders. I do not know one that thinks this way or does this. I know several breeders that use sales for marketing, but they are the better consignment sales with $250.00 to $1000.00 consignment fees. They regularly market -- usually yearlings or 2 year olds left after buyers have picked through them -- through these sales. Since we ride and train our home-raised prospects and still have a market for good, properly trained trail and pleasure horses, we seldom use sales. Many of our friends do and most are very realistic about what they will bring at a sale after the initial shock of the big value plunge in 2007 - 2008.
When 'supply and demand' economic laws get 'out of whack' like they have with the horse market of the last few years, there is going to be a huge excess. Five to ten years from now, when the small crops of the last 3 - 4 years and the next 3 to 4 years catch up to the market, there will be another spike in prices brought on by shortages of good, young sound trained horses and prospects. Ten years ago, breeders could not breed them fast enough to fill the great market demand. And you know what? There were still 150,000 horses a year going to slaughter houses.