It's not really black and white.
There aren't just show breeders and non show breeders.
There are show breeders, hobby breeders, backyard breeders and *shudders* puppy mills.
Show breeding is both good and bad.
The good side is that it isn't just you thinking your dog is the bees knees and like MAC said, being kennel blind... you are putting your dog up for critique for ALL to see and be judged. If your dog is no good it won't win, no matter how "cute" you think it is.
Now here's the thing, my new puppy is out of 2 untitled dogs.
His father was still being shown at the time and a relatively young dog, he has now been titled.
His mother was not shown at all, she is a beautiful dog, but just did not have enough coat to be considered show worthy (she's a powderpuff)
The breeder I went through has been breeding Cresteds for many, many years and she has proven time and again she isn't kennel blind by producing BIS winning dogs so that didn't bother me one little bit.
Now you might be thinking, why breed from a dog with not enough coat? Well, that's the confusing thing with Chinese Cresteds... sometimes you want a lot of coat, sometimes you don't
Show breeders screen new homes and make sure their pups are going to someone responsible. Usually a spay/neuter contract will be in place to prevent people from breeding from their lines.
The bad side is that sometimes people care a little too much about winning and not enough about health.
Now... Hobby breeders, to me these are the people who do not show but still follow the breed standard and do health testing. They can often produce some beautiful dogs, but aren't members of the ANKC so any dogs they breed can't be shown... nothing wrong with that at all for the large population of people who just want a pet but there is no way you can change your mind about showing.
They health test just like show breeders, but (again as MAC said) they can be kennel blind. Even if you follow the breed standard sometimes things can get lost in translation and they just don't see it.
Hobby breeders are usually pretty good about screening new homes and want to make sure their pups have a healthy, happy life.
Backyard breeders to be honest I am not a fan of at all. They don't care for breed standards (often breeding mutts and designer dogs) and they don't do health testing and they don't care about where the dogs are homed (usually)
Backyard breeders will often dump left over puppies at pet stores when they can't sell them.
Puppy mills, well I think we can all agree on that one.
That's my opinion, take it or leave it