A lot of kittens are a result of accidental matings.

Why should responsible breeders not recoup stud dog fees or health test costs? Many do it as a fulltime job so to break even is one thing (as long as they can afford to, usually by having another wage in the household), to do it at a constant loss would cause many breeders to have to stop.
If breeders stopped charging, say, £800 a pup and dropped to £600, BYBs would just charge £500 to undercut them still. I bet their profit margins would still be huge - afterall, what expenses do they have? No health tests, probably no stud fees, cheap food, no vet checkups, it doesn't cost very much to breed a dog in the way that many BYBs will do so they will still make plenty of money even if they charged half as much - they'd probably just breed twice as many litters.

I guess it depends on the reason the responsible breeders are breeding for.

Maybe it would not be a bad thing if some of the more responsible breeders decided not to breed if they cannot afford to.

And then the demand for BYBs rises It doesn't make sense in the longterm for responsible breeders to price themselves out of the game, there will always be a demand for puppies so as the responsible breeders drop, the irresponsible ones will happily take their place.

Are you mixing responsible breeders with back yard breeders? Why should responsible breeders not breed healthy quality puppies? Because other people do it without any regard for the welfare and future of the bitch and pups? 'Responsible' breeders are already breeding for good reasons - usually to keep a pup themselves to carry on the discipline they are involved in. The people who are churning out litters (whether they health test, show, work or not) are NOT responsible breeders.

Not if there is not a profit in breeding.

But if I have done everything right, raised the pups, taken time off work etc. why should I not be paid for that? Not saying that's my motivation at all, but I don't see the problem in breeders making some money for their hard work.

As I said a few posts back, I've seen responsible breeders list their costs and puppy prices and run at a loss, over more than one litter - there isn't always profit.
And as Loki's Mum says, if they've dedicated time and effort to raising healthy, well-balanced, socialised puppies, so what if they take a "wage" from it - many do it as a fulltime job and have mortgages to pay like the rest of us.
I would be happy to hand my money to a responsible breeder even if they pocketed some of it for themselves, and I certainly wouldn't encourage them to give up so that BYBs can replace the supply for the inevitable demand.

Well it really depends on what you regard as a responsible breeder.

An example - collie puppy bought of a shepherd that bred as he wants a pup himself. Health tested and ISDS registered. Then a kennel club registered puppy bred by somebody that competes in agility or obedience. Why is the second pup 2 or 3 times the price of the first? The Shepherd is recouping his costs for health tests and raising the pup. The agility competitor is making a handsome profit. Both are considered responsible breeders by some.

Another example, somebody owns a pet golden retriever. They have a lovely example of the breed and temperament is great. They know of a few people that would love one of their bitches pups if they were to breed. They health test and produce a litter and register the litter. BYB? Responsible or irresponsible? Does it depend on what they charge for their pups and whether they make a profit or a loss?

I don't see why any of those examples shouldn't breed from their dogs. A dog is only worth what someone will pay for it. The Goldie owners - they have a registered bitch - good type, good temperament, healthy. Why would that be a problem? Why shouldn't they charge the going rate for the pups?