Is there some connection between the breeding of the German Shepherd and WWII? My impression is that the breed dates back at least fifty years before that.
Nazi influence on breeding and the use of dogs for experiments (Hitler's "beloved" German Shepherd, Blondi, was famously fed a cyanide pill to test its effectiveness) had quite an impact. Many of the best bloodlines have vanished because of this (in Blondi's case, her puppies were shot and killed after her death) but because of the dogs military value, this was of course not the fate of all of them.
The ancestry of the "working line" dogs we have today can be traced back to these same dogs that fought alongside soldiers in WWII. What's left of them, anyway.
Disney made a historical drama "Chips, the War Dog" in the 90s. http://www.imdb.com/title/tt0099262/ (Though FYI, Chips was actually a Sherperd-Collie-Husky mix.)
I have it on good authority from a couple Giant breeders in the USA that the Russians went on this kennel extermination campaign because the German soldiers were feeding dead Russians to the dogs. I have not seen this specifically documented anywhere though. It would be nice to know the true motivations behind the ruthless killing of these dogs by the Russians.
Some of the founding Shepherd's were white! The foundation stud, Grief, was white. The creator of the breed is on record saying that white dogs have no less working capacity than any other color... So what happened?
Turns out, this was due largely to nazi influence, too. The WWII era really transformed the German Shepherd. From a pastoral sheep-herding companion came a military machine. White dogs, while good at blending in with the flock and being spotted by a Shepherd in the field, were not so good on the battlefield, unfortunately for the same reasons. You can see them coming at night, they are easy targets on a black mountainside.
In other words, the ideas of the time have an ENORMOUS impact on the dogs we create. I don't doubt the Giant Schnauzer story for a second. Breeds evolve to suit the government, the people, and the culture that they are born into...