Is pubic perception really driving the changes in Schutzhund? At least around here, the "public" has no idea what Schutzhund is. When they ask "what does your dog do?" and I say "well, mainly Schutzhund and lots of other dog sports..." they say "schutzwhat??" so I explain what it is. I can't say I've ever met someone as part of the general public that 1) knows what Schutzhund is and 2) has an opinion on how it is trained. I do see lots and lots of people who have years of experience doing it driving a change in training style.
I agree. The emphasis is on "happy" and the road to happy is less stress nowadays. When you remove the stress, you lose the ability to see how well the dog can think/function under stress. Ideally, you want temperament that can deal with stress and still be upbeat and cooperative and able to bond with the handler. You also want a dog who can use his aggression and fight drive and not lose his mind. It is a different story teaching "control" when a dog really means it vs when he is playing. The good dogs, they can control themselves in one regard while going "all out" in another.
Of course, there are beasts out there who train dogs and can kill just about any dog's spirit, but.... there were such trainers years ago and many of the dogs could handle it much better than the dogs now.
There was a level of toughness and a strong desire in the dogs to work for the handler. Those character traits allowed them to overcome the adversity. A GSD should have a certain amount of fortitude and there should be a test that will put it more clearly on display. Either way though, you have to be a trainer to see who your dogs are and the methods matters in that regard.
I expect my dogs to be able to think when I apply a little stress and I do that from the very start. I prefer to see who they are before they have the benefit of training. The really good dogs work their way through things very quickly. Their attitude is not bruised by it and usually, they take that stress and make some fuel out of it. The good ones have the ability to channel it, without becoming resistent, nasty, frightened or panicked. Only takes a few minutes and they have figured it out and moved on.
These things can't be seen with other methods and that's not saying people should not use them. However, I think breeders should not be looking for the ability to earn points, they should be looking at the dog and actually undertstand what they are seeing. Again, for me, that requires that I train dogs and have an ability, to read them. That is a skill that has been going away for some time now. The emphasis has shifted more to training designed to make the dogs appear to be something that they might not really be.