I'm sort of torn on it. I think some rescues definitely have rules that are too strict if they are unbending. Mostly rules about vaccinations, neutering, fences, and children that apply to all dogs in their care. That said I do think some rescues might put it there just to scare some people away and they really are willing to make exceptions for certain households/dogs...though that's sort of stupid because they scare away good people too. I also can see where it might be hard for rescue people to adopt a dog out to someone who, although will provide a forever home where the dog will not be neglected and will be very much loved, is going to feed Ol Roy and worships Cesar Millan. But I can also see how it's not fair for the rescue to decide what the right way to raise a dog is.
I've volunteered with a rescue that is sort of strict. Does home checks, gives holistic homes preference, requires a fence for households with kids under 12, requires stay at home or work from home owner for young puppies, requires enrollment in an obedience class for puppies and young adult dogs, requires a vet and two personal references, asks for your employer info, and charges $400-$450 for their dogs. Plus they turn down people who they just get bad vibes from or who have had a dog die from something they deem preventable unless the family seems to really have learned from it. They demonize "chaining" and will not adopt to you if you plan to tether the dog at all. To adopt you must fill out a 4 page app and get approved (asks about work hours, current dogs and if they are neutered and where they are housed, asks what you will feed, etc.), make an appointment to meet the dog at the shelter or foster's home (and your dogs have to meet the dog) and talk to an adoption counselor, have a home check, then can take the dog. All of the apps that they have on a dog are considered and the best of the bunch is chosen (they usually get a huge chunk of apps on weekends when they have open hours to meet the dogs, no appointment needed). You cannot go in the kennels, you either describe what you want and dogs that fit the criteria are brought out, or you ask for dogs that you saw online.
I have just started working with a shelter in Maine that is a kill shelter (though with a low kill rate, they have something like a 90% adoption rate) and adopts out dogs much easier. You come to the shelter (open at 11am every day) walk through the kennels (you get 15 minutes to do this), pick out one or a few dogs you like, fill out a 1 page questionnaire that asks a bit about what you want (activity level, good with kids, good with other animals, what the noise/chaos level of your house is like, how much you plan to spend on the dog per year, how much training you are going to provide). Then an adoption counselor talks to you about the dog(s) you chose to make sure they still sound attractive. You can see the dog in a meet and greet room or walk him around on leash outside for a bit. You should have brought any other dogs with you and they must meet the prospective dogs. If you still like a dog after that pay the fee ($145-$300 depending on age of dog, adult cats are free) and he's yours. I don't actually know what you need to do to get turned away, I feel like the questionnaire you fill out is more so the adoption counselor can steer you towards/away from certain dogs but I don't get to see the process. Dogs are given on a first come first serve basis so even though there might be 5 people waiting to see one dog if the first one decides to take him then he it's his.
So on the one hand, the second place moves dogs out MUCH faster than the first because way more people qualify to adopt. However I also think the return rates of the second place are much higher. About one week after I went to the second place all of the dogs that were there (except a senior pit bull whose been there a while) when I was there had been adopted. Then about a week after that three had already been returned. One of those was readopted within a few days of being returned, 2 are still waiting. The first place rarely has returns, maybe a few each year. I don't know if it's worse to hold onto dogs longer to find a "perfect" home right off even if it means turning down people who could have been fine or adopt dogs out quickly and have dogs go through a few homes before finding the right one even if some dogs do find the right one the first time. Neither of these places are terribly extreme IMO but they are certainly different. And I'm not sure which I like better yet. I wonder how traumatic it is for a dog to go through a few homes before getting adopted for good, that might sway my opinion.
I don't know, I think it's hard. Yes, people who get turned down might go to BYBs or puppy mills. But I don't think that means we should knowingly put dogs into crappy homes just so we can empty shelters. But I don't know how picky is too picky either. Obviously I have an idea of what a perfect dog home is, and very few people fit into that. I'm sure every rescue does too. So how does a rescue decide how far away from perfect they should let a home be before saying no?
I do think rescues should talk to the potential adopters before turning them away, explanations for what they wrote on their apps are very important IMO. Their willingness to learn is also very important. I'm sure a ton of people here used to take worse care of their dogs than they do now, it just took education and we were very willing to change. I'm sure there are plenty more like that out there.