They might, they might not. If you phased it in, the thing is the AKC has clout, it has brand name recognition. When I talk to the general public and talk about going to dog shows.. they all think Westminster.
So given all of that, requiring that people must title their dogs in "work" before being able to show them, thus adding even more expenses to an already expensive hobby would probably do AKC in.
Those costs are a pittance when it comes to showing. THe whole thing is you make shows open to all, but only dogs with working papers/titles what have you, can get championship points and watch a good number of breeders get their dogs back to their roots no matter the costs.
That is the system in the SV and USA with GSDs. There are people who want to be very competitive in conformation shows. This seems to hold true no matter what sort of show system exists.