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I see it as completely the opposite. Nobody uses mutts for a puppy mill.
I have 3 mutt cats and they are spoiled rotten...and they are all fixed.
Its just my opinion, and largely based on mutt and cross breed horses. Im all for do what you want with your own property and such, I personally can not justify or condone careless and frivolous breeding. It hurts to see so many decent horses go to slaughter because of careless breeding and the want of something cute. Tiny babies turns into great big horses quick. The way the horse market is right now unregistered animals have to be super high quality well trained animals or else they sell for virtually nothing. Meat buyers are getting tons of animals off places like craigs list and profiting off it greatly. High quality purebreds are selling for thousands less then what they are worth. Grade horses are selling for under 500 dollars.
Also imo it takes more then just being registered to warrant breeding an animal, temperament is huge for me, conformation, quality and proven performance are other big factors. In other words it has to be a pretty spectacular animal that could improve the quality of further generations to be worth breeding imo.