There is an easy solution to this, rescuing abandoned dogs. We have had two dogs (down to one now after a cancer battle), and both would have had not home, or been parked in a volunteer run shelter left alone most of the time.
I think they are surely better of with us, and I don't think we increase demand in any way.
I do agree with you that breeding dogs for a life in captivity might not be a morally good thing. Hard to say.