My breeder keeps her dogs inside with her and only keeps a minimum number of dogs. If she feels she can't give a dog the attention it deserves, she rehomes them. In fact all the local breeders I know, and I've met a number of them over the years, are all the same way.
I think you'll find that in most smaller kennels the show dogs are also house pets.
Same for my breeder - this is exactly why we were able to get Domino. She felt he would have more attention and interaction if she rehomed him so she did BUT he was raised inside as a house pet with several other dogs. That being said I did notice that Domino behaved similar to the way you are describing wendystation. He did not know basic commands and was very shy and lacked confidence. I think this just comes as a result of being one of several dogs and not having alot of one on one time to build and work on these things. This is not to say that he wasn't well looked after by our breeder - in fact the opposite. I have found that time really helps - let the dog get used to his new home in his own time. I have also found that training has not only taught Domino basic commands but has increased his confidence tenfold. I put this down to the method of training - as many people mentioned use only positive training methods and I have found that clicker training has really made a big difference for us. Just make sure the dog knows that he will NOT get into trouble or be reprimanded for trying something "wrong". This really builds confidence and Domino is now confident, forward and excited in new situations and around new people. I have really noticed the change in his attitude in the last 6 months...and we have had him for a year and a half so it is a slow process but worth it!
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She does everything a pet would do, she just gets pretty on some weekends and trots around a ring. I also trained her puppies as long as I had them. I placed 1 at almost 9 months when he went oversized and he had tons(recall, sit, down, heeling, stand, beginning retrieve work, a mark, pivots, turns etc, crate trained etc) of obedience training. Surprisingly he never sat in the ring despite knowing how to do it. I just taught him the meaning of the word stack.