I've always understood 'rescue' to mean groups that don't have a public facility, and so house available pets in people's homes. I don't think it's a mark of disgrace that the shelters kennel and cage dogs; I'm sure many 'rescues' use crates and kennels as well.
Large dogs were crammed two or three in each small outdoor kennel. The medium-to-small dogs were housed in crates. There were sheds full of crates, stacked one on top of the other
It sounds like overcrowding, and I would think they could be reported to authorities. Though considering how indifferent most communities are about crimes against animals, good luck getting action.