I've sat on my hands for a couple of days but can't restrain myself any longer.
This is a great thread and interesting because although this is a 'breed' forum and therefore the majority are going to have purebred dogs, there are a lot of different views on the subject of designer crosses.
On the whole I'm not in favour of deliberatly breeding 'designer' crosses. Those who stated that crossbreeding is behind all modern breeds are correct. I think the point was also made that while the technique was similar, the rationale behind it was vastly different (with the possible exception of some toy breeds) and critically the knowledge of the breeders was vast. They were purposeful and yes, ruthless too with what was retained for breeding.
Being contraversial here, shelties as a breed were developed for the show ring, the small, rough coated working dog on Shetland was the starting point for breeders who wanted to create a minature show collie. The breed type was not developed for a specific working purpose in the same way as for example a daschund. Thankfully, those early sheltie breeders made good desicions and their legacy is the sound, versatile, intelligent Shetland Sheepdog -and of course the collie 'template' on which the breed is based
was the result of form following function.
So cross breeding per se is not a bad thing if done for a genuine reason such as to improve a certain feature or eliminate something undesirable. You may be aware of the Dalmatian/Pointer crosses done to reduce the incidence of bladder stones in the former and there are other examples. I don't have a problem with this if done openly but I know there are a lot of breeders who insist on purity at all costs for the reason that an outcross could introduce a whole set of new problems. But that is really another discussion for another time.
A bit of background history:
The original 'Labradoodle' cross as most people know, was done to produce a Guide Dog that was more suitable for allergy sufferers. The programme had, I believe, mixed success and that would have been the end of it BUT for the desicion to make the cross more attractive to potential recipients by giving it a Name - and thus the Labradoodle term was coined and that, as much as the cross that was the point of no return. Sadly the idea of supposedly 'hypoallergenic' (there is no such thing) dogs with funny names caught the public imagination and there followed a global competition it seems as to who can come up with the wackiest crosses and the most imaginative names. The morals and ethics that should be associated with any deliberate animal breeding went out of the window. Because the names sounded good and these were labelled 'designer dogs' they became the new 'must have' accessory with people paying out small fortunes to own an 'Oodle' without giving any thought to whether it was appropriate for their circumstances.
We have a lot of designer crosses in our village and at training, they outnumber the gundog breeds (previously most popular) significantly now. I have found them almost without exception to have lovely tempraments and basically really nice dogs. If I wasn't a committed Sheltie addict I might even consider getting one BUT the difficulty is finding anyone breeding who is doing it ethically for justifiable reasons. The motiavtion most people have for breeding these dogs is money. I don't weigh in with the ethical breeders make a loss/bad breeders make a profit because it isn't clear cut like that. But when the primary motivation for breeding is money then other considerations such as health testing, selecting parents that compliment rather than contradict and good rearing practices are relegated. If your sole reason for breeding is to make money the temptation to cut corners and keep costs down is massive. Unlike breeders who produce dogs for the show ring or working reasons these people are unlikely to keep a puppy from their litters so have no vested interests in ensuring the long term well being of the dog. Once the money is in their pocket that is the end of their responsibilities as far as they are concerned. In that respect BYB and Puppy Mills are no different.
The other thing is of course there is no guarentee what you will get. There was a TV programme the other night (in the UK) where a party was held for a poodle stud dog and his pure and crossbreed progeny. He had sired over 400 puppies

(far too many IMHO) but the interesting thing was no two were alike. In fact one of the labradoodles looked like a purebred labrador! Many years ago a beagle in our village mated somehow with a doberman (unplanned) and of the four puppies, three looked like doberman pups and one was a ringer for a purebred beagle, no no nice blend there. I do get cross when people think breeding animals is like making a cake - put in all the ingredients and get a nice outcome at the end. It's often more like mixing oil and water!
I'm also very alarmed at some of the crosses between totally incompatible breeds (some are downright dangerous and I've heard some horror stories.) A common cross we see are working cocker spaniels crossed with poodles. These are charming dogs but the poor things have all the energy of the cocker and the poodle coat which constantly gets tangled in undergrowth, matted and dirty. They take a lot more grooming than our shelties (which is true for most poodle cross offspring) and owners are often unprepared for this. Some coats are dreadful because they partially shed and this causes horrific matting even with regular grooming.
Lightplum- like you I shuddered at those new laws. They seem to favour rather than hinder puppy mills.
Lastly, regarding PDE. I have a LOT of issues with the programme and the statements made. It did a huge amount of damage and some of it was sensationalised. The worst aspect was people looking to get a puppy were left high and dry, totally confused and at the mercy of unscrupulous breeders and puppy farmers. No the fact a dog is KC registered gives no guarentee of its quality, only its pedigree (another discussion for another time) but the chances of getting a nice well bred pup from a breeder registering from the KC were vastly higher than from Joe Bloggs down the road or worse still, the pet shop. Suddenly show breeders were also the bad guys so where does someone go to get a dog?? Yes it was very unfortunate and damaging but I will never say it was rubbish. It really did make breeders think and perhaps question things more. Certainly there is far more focus on health than in the past and in many areas things have improved. I think it will be viewed ultimatly like lancing an abcess - painful at the time but necessary!