LOL I'm used to this conversation!
I grew up in Germany and my dog carries only SV papers. From what I can tell you there is sentiment among German working line breeders that the show dogs aren't good for the sport. And there is sentiment among the show breeders that the working lines don't conform to the GSD standard.
In our experience, most Germans actually own a dog of show lines (your standard saddle black and tan) and most breeders breed this type of dog. The Bundessieger show is more popular than the BSP, though there are GSD enthusiasts who frequent both.
I could have had a working dog, and I saw several litters. I didn't like what I saw. The dogs lacked, IMO, the grace and presence of a shepherd. One very well known breeder tried to pull one over on us \"dumb Americans,\" as well. We told him what we were looking for in a dog, and we knew how much he generally charged for a puppy through others who had purchased from him. He quoted us a price of 800 euros, which was about 200 euros above his norm. When we told him we'd give him 650, he laughed and told us he had a dog he'd sell us for that much. He brought out a NERVE BAG of a dog. I have never seen a shepherd so skittish! I pet her for a minute (she really was a beauty, just not suited for SchH at all), and then laughed at him and told him to have a good day! Besides this issue, when we went to see his litter the dam cowered away from us, laid her ears back, and became submissive. Her pups were only 3 weeks old at the time! She shouldn't have been letting perfect strangers near them.
Then we decided to look at some of the nearby show litters (we were very good friends with the man who did hte ear tattoos, so had the skinny on promising litters ready for sale in the area). I looked at one and didn't like what I saw. Banana backs, skittish dam, puppies seemed to lack drive. Uh uh. Then we saw Achilles' litter. Dam out with her puppies wrestling, dam and grand dam with perfectly straight backs. I got too close to the puppy enclosure while talking to hubby -- the next thing I know Donna (the dam) is doing a running bite straight for my ARM! She grabbed it and shook, released, and then barked until I moved away. HOT DOG!!!! I picked the best (IMO) male from taht litter right then and there LOLOL! I had those bruises for weeks!!!!!!!! Thank god it was her and not the grande dam, Hera: she's SchH 3/IP 1 and was quite a scary bitch in her day...Donna only made her SchH 1...
I think what's been lost in GSD breeding is balance. Just as a line can be bred too closely on looks with no emphasis on working ability, resulting in nerve bag dogs who can do more than look good, a breeder can also focus too much on drive and end up with dogs who no longer resemble shepherds, or who can't function as companions because of their exceptionally high drives. Neither, IMO, is a proper GSD. These dogs are supposed to be a \"jack of all trades.\"
Now as for SV and SchH...I can only speak for the clubs in the Wurzburg/Kitzingen area as that was where we lived. There were 3 in Kitzingen, 2 in Wurzburg. The first we took Achilles to for puppy classes was run by a K9 handler who favored Czech adn DDR lines. He looked at our dog's pedigree and told us we were wasting our time. Even made a point of grabbing out a DDR puppy the same age as ours to show how much more drive he had. Imagine his surprise when our puppy pushed this one of hte way to grab the tug! Hee hee... The 2nd club was in a small town called Grosslangheim. The members regularly enrolled their dogs in the BSP; one of the ladies owned a dog who had taken 2nd in tracking a couple of years before at the competition. They were serious, out at the platz nearly every day. They readily accepted our \"worthless\" show dog and commented every time we brought him on how high his drives were and how focused he was for his age. We never got any sort of prejudice or resentment from this club -- except the first time we went and were told that if we weren't serious, don't come back LOL.
I can honestly say, though, that we've encountered more prejudice against our dog's pedigree here in the US than we did in Germany. I'm not sure what to make of that...