Shelters that have such overly stringent placement requirements are absurd. Still, I assume they place some dogs and blaming them for puppy mills makes no sense. The people that keep puppy mills in business are people that buy puppies. If people stopped buying puppies from all but reputable breeders the problem would go away. Of course most people can’t afford 1k-3k from a reputable breeder so a $300 -$500 purebred is their choice. They either dont know or dont’ want to know the source of their $300-$500 puppy. They buy from CL ads looking to “rehome”, from pet stores, or from puppy mill owners posing as individual litter breeders.
As for serious aka reputable breeders, they have demand for their litters and are not part of the problem but are not part of the solution either. The solution is legislation to close the puppy mills and encouraging dog adoptions instead of puppy purchases. Most people are not set up to train and socialize a puppy no matter how well intention, which is why so many puppies once grown and no longer adorable fluff are headed for a shelter and end up the full grown dogs fewer folks want.