I really want to know the WHY behind why it's not nearly as bad in some breeds as it is in others from a genetic standpoint. But I don't think our genetic knowledge, particularly of coat colour genetics, is at a point where we can know that "why" yet.
This is an interesting article about merle in Catahoulas:
http://www.donabney.com/issue_merle.php
The Aussie breed has some pretty influential merle to merle breedings in their history. And considering the breed used to be called "little blue dogs", I'd guess that merle to merle breeding was probably fairly common historically. Of course, those were working bred Aussies so the situation was likely more similar to Koolies than comparing it to such breedings in show Aussies, Collies or Shelties. Blue merle seems to change when people are selecting it for looks. The more natural merle seen in working dogs tends to be "muddy" looking compared to the clear, less patchy merle seen in dogs selected for show. Although, there have been merle x merle breedings throughout history in show bred dogs as well as working bred dogs.
This old Cardi breeder talks about breeding merles and says she had done merle to merle breedings:
http://www.cardicommentary.de/Coloursandcoats/BlueMerles.htm
I'm not suggesting merle to merle is not big deal but it is part of the history of many breeds which have merle. And it's a common part of modern breeding practices in breeds with a merle heavy population. I have a dog who has a double merle grandsire, a happy, healthy dog (normal vision/hearing) that I happen to really like and would have definitely gotten a puppy from. It is easy to come up with strict rules suggesting what breeders should or shouldn't be doing in any given breed but breeders have reasons for doing things that seem controversial too. And it isn't always for simple reasons like "to get pretty puppies". Breeding is seldom easy or black and white. If you know enough about any breed, you find everyone is taking risks of some sort because there are no genetically normal dogs - every dog has the potential to produce less than ideal health or temperament.
I'm not saying that breeding merle to merle is acceptable. Or that it isn't. I don't really have plans to become involved in breeding a breed where merle is an option, so in that way it isn't really for me to decide. It is for the people actively involved in merle breeds to determine the limits of what is or isn't acceptable in their breed in modern times. Just like any other potential risk with any other breeding, the pros and cons have to be weighed and serious consideration needs to be given to if the risk is worth it, how great it is and if there is a less risky but just as compatible option to consider.
He's advertised on the breeder's website. And nowhere on the website does it say that he's double dilute or deaf and blind.
FWIW I'm pretty sure that people who are breeding show collies (and thus, the people looking at him as a stud) can tell he's a double merle by looking at him. It is pretty obvious. So I don't think anyone is being tricked into thinking he's something other than what he is.
I wouldn't be surprised if some stuff is being swept under the rug... I mean, it is the dog world, but I think you have an interesting point.
Without a doubt, there are always people in any breed who aren't going to 100% honest about what their dogs are producing be it health, temperament or structure.
However, with a color based issue it's a bit easier to see with your own eyes what is going on. Like I said about Avalanche, he's obviously a double merle. You can also look for pupil abnormalities, and the tell-tale white merle markings. And consistently small litter sizes can mean that either puppies are getting reabsorbed, there is some sort of reproductive issue or a number in each litter are being culled.
That is not so much the case with late onset issues with no screening that are never obvious to the observer. Such issues can easily be denied or just not talked about and no one other than the breeder or dog's owner would ever know the difference.
Breeders should be able to see and make note of merle in colors which hide the pattern as adults when puppies are born. You can absolutely see merle on neonatal sable/fawn puppies.