Breeding 'for the betterment of the breed' has its own issues, though.
Firstly, if everyone is breeding towards one specific physical type, the gene pool will get smaller and smaller, with all the issues that come with that (high COI, increased burden of genetic disease).
Secondly, the image of the perfect dog of that breed cam become increasingly extreme, so we end up with dogs with no snout to speak of, or ridiculously long ears, or whatever, none of which benefits the actual dog, though it might win show awards.
Thirdly, other quirks creep in, because the show winners are seen as 'the best' by many breeders. The breed I own is increasingly splitting show/work and I have been told that what wins in the show ring is a flashy stride. That results from a straight shoulder, which isn't what you want in a dog out working all day in open country.
If you look at working type in a lot of breeds, there is considerable physical variety. The dogs are structurally sound, but vary in height, depth of chest, set and length of ears, coat pattern etc etc. Once the show ring gets at them, type narrows and working ability diminishes - I heard a gamekeeper say literally yesterday that it's now very hard to find a good working stud in the UK in the breed he has. I think that breed will end up with a show/work split like Labradors.
IMHO there is nothing wrong with cross breeding if the breeder has homes lined up, relevant health tests have been done, cares properly for the dam and the litter, and there is a purpose to the mating - even if that purpose is just to produce low-drive, relaxed, highly social pets. What is wrong is churning out puppies, pedigrees or otherwise, in shoddy conditions to make a quick buck, or breeding dogs that you know are likely to suffer because of their morphology, or with a very high COI.