This is a completely different situation than what I think you're thinking of....
Tying a dog up to a tree and leaving it to live that way is mean and inhumane.
Tying a dog to a tree for a training session is tying a dog to a tree for a training session. These dog's aren't left tied to trees for extended periods of time. A protection session usually lasts 10-20 minutes, generally no more or both helper and dog are too tired, all or part of that session may involve backtying the dog or it may not.
Backtying is a necessary part of the training for the many reasons stated in this thread. The same could be accomplished if the handler was holding the leash instead of a tree doing so. It's just sometimes safer, more practical and often more conducive to a successful training session to have the dog tied to an immovable object and the dog's handler free to move about.
This is just part of protection training that all schutzhund (and police, and military, and other protection trained) dogs go through. And no, this type of dog isn't always a kennel dog. Some are, many live in the homes with their handlers. The dog pictured above lives in the house, cuddles on the couch, sleeps on the bed, accompanies her owner on errands, goes on camping and hiking trips, etc... She's also a pet, as are most schutzhund dogs.