Well, if Riley is registered with you as sole owner, then you are the only person who can make decisions about whether or not to show him, or to brace his ears. If you honestly feel this way, then tell the breeder that no, you don't want to do that to him - that's the end of the story.
There are a number of people here on the Forum who are involved in showing and breeding Shelties for conformation. I don't want to speak for all of them, but I know that I can tell you (having spent the wide majority of my life watching my mother glue/tape/brace puppy ears) that there is nothing cruel about it. It's no more "cruel" than putting braces on a child's teeth. There is actually a reason for why the Standard calls for tipped ears - they provide better protection for the ear canal against the elements.
I can sympathize with your breeder, because it is frustrating to sell a puppy as a pet, only to find out later that 1) it has turned out to be a potential show dog and 2) the new owner is not interested in showing. Unfortunately, that's the breeder's loss. Showing your dog is a tremendous committment that you, the owner, need to be 100% ready for, and it's obvious that you aren't keen on the idea.
I would suggest that you tag along with your breeder to a few dog shows, and take the opportunity to learn more about the Sheltie standard and how shows work. Asking your breeder to tell you more about the process of "doing ears" would, I think, also be illuminating for you. Who knows, you might decide that showing is right for you and your dog - or you might decide not. In either case, the choice (like the puppy) is yours.