Well, no, I cannot explain why people do what they do. But, I believe kennel clubs have much to do about it. For example: a Pug’s AKC breed standard calls for a slight underbite and a short, blunt muzzle, while long-legged, lean pugs are opposed. Or the Pekingese whose AKC standard is to have a very flat muzzle and an undershot jaw.
However, there are people that are dedicated to preserving breeds and improving them. Dog breeds have definitely gone downhill the past 100 years, but it has been made aware. People know that and are trying to fix it.
There is a breeder in Germany that is breeding “Retro Pugs”, originally posted by @perfectdogs here.
I believe breed preservation is important, and I think it is wonderful that there are people who are dedicated to breeds so much so that they are willing to spend all their time and money on them. Not many people will research, health check, and pay for a Borzoi just to turn around and dump it in a shelter. While adopting a mixed breed dog is often done on impulse, and more often who end up in shelters.
But this is for the United States. Germany has actual breeding laws. “In Germany the breeding of certain brachy breeds has been abolished as “Qualzucht”, which means that simply breeding more puppies into existence is considered an act of animal cruelty.” – @dogsaremypatronus
So, no, I cannot explain why people continue to promote unhealthy breed traits, but I hope that the practice of improving them catches on.