For far too long, we had an uneducated breeder population in North America that did not understand the importance of the damline. Many, many breeders started with a mare they loved but who for one reason or another may not have been the best candidate for breeding. Other breeders had the philosophy that they could breed any old mare - oh, she is unsound or unridable, so let’s breed her (but don’t worry, the stallion will fix everything). Couple that with the fact that buyers hardly ever asked about a prospect’s dam - and really, sometimes didn’t even care who the sire was. As long as the horse checked the necessary boxes - it was a 16.3h dark bay gelding, it passed a riding test, it passed a PPE, and it was in the right price range - so the deal was made. (This was especially true in the hunter world for a very long time where the general philosophy - as pushed by trainers - was that hunters were made, not born.)
Also, many breeders in NA started with TB mares because they were readily available and usually very, very inexpensive. Some of those crosses worked out pretty well - esp. for hunters and eventers - but the vast majority of them were so-so. It took the Euro registries expanding into NA to really get the breeders here turned around and start understanding the importance of quality mares and strong damlines.
As for figuring out which mares are worthy of breeding without putting them in a performance career - many good breeders send their young mares through performance tests. Some of the breeders I know in Europe will breed a mare early in her 3 y/o year and start her lightly under saddle some months later, do their registry’s mare performance test, then put the mare back in the field. If she is a really nice quality mare with a deep damline, she did well in her MPT, and her first foal is a stunner, the course is set for her to become a career broodmare.
And I echo Arlomine’s comment about ET. I meant to post something about that earlier, so I am glad Arlo brought it up. The advent of ET has been a game changer, as quality mares can both compete and still contribute to the gene pool.
I am adamant on my mare lines. All my mares were purchased after I saw offspring of theirs. I think the mare line is incredibly important, and while some disagree with my breeding choice on here my mares are the upmost importance in my breeding decisions.