Back when @gumtree was around, he made a point that really stuck with me: water seeks water.
The number of TBs being bred each year is dictated by the demand.
In 2019, over 36,000 races were run, with an average of 7.5 horses per race and an average of 6 starts a year for every runner.
That’s why there are so many TBs out there.
If you breed less horses, you are still going to have roughly the same percentage of “culls” who never make it to the track for horsey reasons like injuries and illness. Tightening breeding practices might slightly reduce those culls, but breeding TBs is expensive. If a horse can run, it usually does (with a few exceptions, like extraordinarily valuable fillies who would only be successful at claiming conditions lower than the value of their pedigree).
If you breed less horses just for the sake of breeding less horses, many race tracks will be forced to close because they will not be able to fill their races at a level to interest bettors. If those tracks close, breeding will further be reduced.
Eventually, you are only going to be left with the elite breeders and elite race horses. Which may sound good in theory, but it comes with its own complications for the future of the OTTB.
The biggest problem I foresee is the loss of genetic diversity: just look at places like Australia, which has a much smaller TB industry than our own. It is the norm to see modern AUS racehorses with four or more crosses to Northern Dancer through his son Danehill, because people will breed to what is successful and what is winning races at the top levels. What is winning races often is drastically different than what sporthorse people seek.
“Cheap” state breeding programs in the US have often been the source of what many would consider “over breeding,” yet these state breeding programs have also preserved a lot of durable (yet slower) horses with sport-friendly bloodlines. These bloodlines persist at the state level and occasionally get reintroduced into the top levels of the sport when an exceptional individual crops up (Tiznow would be a good example).
It’s a complex problem without an easy solution. The most important thing to remember is that racing is a multi-billion dollar industry; show horses pale in comparison to how much revenue racing generates. It’s easy to say racing should do XYZ because that is what works for sport horses, but there are massive economic forces driving racing decisions. I’m not saying that to excuse racing from responsibility to their animals, just to point out that people aren’t just doing this as a hobby. We have access to relatively cheap OTTBs that can still reach the highest levels of sport because of the current racing industry. That would not be true if we simply bred less horses.