If there were no test litters, would there be a German Shepherd Dog? The creation of this breed seems to have been a series of test litters.
Well, it always is during a breed's creation period, to concentrate genes and set traits. But we are no longer required to breed that closely, and most people shouldn't, unless they really know what they are doing.
Not only can close line-breeding be used to bring out the bad traits quickly but many times it is useful in solidifying some traits and also fixing traits. It is a very common practice among breeders. And not just purebred dog breeders. We're also talking about livestock, cats, rabbits, racing pigeons and the list goes on.....
I have no ethical problem with it when it comes to livestock. With cows, chickens, rabbits, etc., you can eat your mistakes. When you're talking about dogs, you're talking about a different paradigm.
I guess my major concern with "test breedings", whether inbred or not, is what happens to the puppies that don't turn out as hoped, or that inherit the worst genetic hand that could possibly be dealt. Of course that is a concern with any litter, but especially with a test litter out of unproven parents or with a high inbreeding coefficient. If all you want to do is make sure your stud is fertile, getting a sperm count done seems a much neater solution. If you want to ensure your female is a good mother, get one who comes from a long line of good mothers. I don't know, that seems to make better sense to me, but I'm not a breeder. If weak libido and poor maternal instincts are an issue in a certain breed or bloodline, I guess I'd pick a different breed or bloodline to work with. It must be a frustrating problem if the dogs are outstanding in every other way.
If dogs weren't as overpopulated as they are, I couldn't get too upset about "test breedings", as long as the puppies of such a breeding are responsibly dealt with. But somehow it just seems that there must be other ways of testing a dog's reproductive system than to bring another litter into the world that may or may not pass the test.