Hiya,
Like other people have said there are good and there are bad - we've seen both. My mum's ESS Dillan we "picked up" at supposedly eight weeks old - try five!!! and was living in a shed at the bottom of the garden away from his mum, no this isn't the sort of place we want to "support" and get a dog from - but in all consciounce we couldn't leave him there and home he came, he is extremely clingy to us and anyone who'll give him physical contact, he's a big baby and has never grown out of it (not a problem for us, but would have been if he'd gone to a home that insisted he worked) Dillan can do flyball, agility and gundog work but really all he wants is a cuddle and lots of love - so he retired at 18 months old - he never even saw a ring and thats fine - but not what i'd want all our dogs to be like!!! Moses (the other ESS) came to us "re-routed" from a game keeper and had been raised in kennels, he is the opposite of Dillan however, and it's obvious he's been well looked after whilst living outside.
Ziggie was raised in a barn and the breeder had trouble from three weeks of age (kelpie pups are very agile) keeping them in the pen and would find them quite often in the sheep pens - he also is a keen dog who loves people even if he doesn't crave the attention that Dillan does...
To be honest I think it's personal preference where the dogs live - if these people breeding badly from kennels brought the dogs into the house would that make them better breeders? no! if well cared for dogs were put out in kennels would they be just as loved? yes! It's the owner and their attitude that matter not where the dog sleeps at night - there are good owners and there are bad! Thats the real issue not where the dog is living!
H xxx

Excellent post Kicks I agree 100%