I don't think the AKC is an evil organization, but I think that it has contributed to the downfall (for lack of a better word) of some breeds. Some breeds there is not a huge split - I know many CH Australian Cattle Dogs who work a farm every day and are still sound and have a lot of herding instinct, but other breeds like the German Shepherd are hardly recognizable.
It's not just a KC thing - it's not even just a dog thing. It happens when people start focusing on one aspect of a dog/horse/cat/etc and lose touch with that the breed is supposed to be and it's original purpose. People who focus on conformation lose that intense instinct the dog was supposed to have. On top of this we have current fads - some big judge loves a huge over exaggerated gait and doesn't hide it. Breeders start to breed for this huge gait and truly important things like soundness and good structure gets the back burner. But, their dogs win and their puppies sell so who's complaining?
Like I said, it's not even a dog thing. The AQHA (American Quarter Horse Association) is well known for the split in the types of Quarter Horses now - a big Hunter Under Saddle horse and a reiner don't even look like the same breed anymore. The horses that used to win at AQHA shows were true allrounders and beautiful, sound horses. Then judges started liking halter horses with a lot of mass and muscle. That's all people bred for. Halters horses are now 1500 pound giants with no bone, no hoof, and straight as an arrow hocks. Hunter under saddle horses are supposed to have a big, floaty stride. People took that and ran with it and now we have 17.2 hand (Quarter Horses used to be in the 15 hand range or slightly smaller) "Quarter Horses" who are in reality probably only 1/18 (ok, edited to add an actual possible fraction, not the first number that came to my head, so people don't think I'm dumb LOL) QH, the rest is all Thoroughbred. Neither of these "extremes" could check fence, stop and hold a full grown cow, or cut a dirty cow all day every day. They'd either break down or wouldn't have the strength and agility to.
That's not to say that the breed is ruined. There are still many people out there who still use their horses on the ranch and these horses better represent the QHs of yesteryear. Some of these horses are "foundation" bred (although I see more crappy foundation stock than I do nice ones), some are fairly modern cutting or cowhorse bred (but bred from individuals picked based on their decent size and suitability outside the ring - the cutting side of things are not without their fault, and I will admit that even though cutting is where my interests lie), some are a cross of the two. I also love how the vast majority of racing bred QHs are conformed. A very well educated lady on a horse forum I'm on believes that speed = versatility, and that it's the specialization/lack of versatility that has changed the Quarter Horse so.
OMG, sorry to turn that into a total horse rant. That was probably like trying to understand Mandarin or something for a lot of you, LOL. I've always been more involved in the horse world than the dog world though and there are a lot of similarities. It is the breeders who have changed the dogs so, but it's because of the judging of events like conformation that are totally up to a person's own preferences and likes and dislikes. Trends in the ring are almost always based on what is being "used" or in other words placed high. When trends happen, like a lot of coat or a very domed skull, the rest of the dog (soundness, topline, etc) is no longer looked at when the breeder determines breeding quality and plans matings.
The English Shepherd crowd is very against these dogs getting AKC or CKC recognized (they are UKC recognized). It would have its benefits - it would be way easier to compete in events and some people really enjoy showing conformation. English Shepherds might not ever get popular enough for trends to emerge and for people to start breeding towards those trends, but who wants to take the risk.