Indeed "designers" can still become loving family pets. The original idea was well-intentioned, but once people caught on to how profitable it was, they just started buying and breeding like mad. This is where backyard breeders really started hitting the designer market, resulting in most designer dogs being generally unhealthy.
Breeds of today in general are not at all what they used to be. The Pit Bull Terrier was meant to be just that---a terrier. Much smaller than the pitties of today. I overheard a man in Petsmart just the other day who was bragging about his "150 pound Pitty, holding the record for the largest in the world." Pits were not meant to be that large by any means. Fighters found the dog's extreme success in the ring and started breeding for size to get a bigger, stronger dog. Granted, Pits have always been stocky, muscular dogs...but not intended to be so large.
Border Collies, the working type, were initially bred in Scotland and a select few other places solely on how they worked. Originally, some sheepherder had a collie-like dog who he really liked as a working dog, and he bred it to another good working dog, and so it goes. It wasn't until much later that health was incorporated, but even still show quality and working quality BCs aren't always bred with the same values in mind. Health is much, much, much more important these days(with professional breeders), but show breeders aren't looking for a BC who can work sheep or run an agility course at blinding speed. Working breeders who breed solely for work don't guarantee their puppies will win conformation shows. But they'll guarantee that they are healthy and will work livestock great or perform in sports well. Because of the original breeders of the "BC", they vary greatly. It wasn't the looks sheepherders were looking for, it was the work. Border Collies are perhaps the most various of all breeds in terms of just general appearance. They're mostly the same, but there are many individual differences. The Scottish BCs tend to be much more similar and have a few slight differences compared to those of other countries.
Plus, the less picky breeders don't take into account what they're breeding...
Let's say they have an American Lab and an English Lab(do some research, there is a difference), and produce Labradoodles from both. Their personalities will be drastically different, size will differ. But all your English Labbydoodles have been so laid-back and intelligent that you advertise your breedings as producing calmer, easy to care for puppies. Then someone ends up with a Marley from your American Lab/Standard Poodle litters and wants to know what the hell happened.
The idea itself isn't all that "bad," necessarily. But the majority of breeders don't take the right precautions and have the right values in mind. That's the downside.