My understanding of the line breeding/inbreeding to date has been that you can breed siblings, it's not as desirable and you don't want to keep breeding siblings generation after generation. It is more beneficial to linebreed father to daughter/son to mother and breed best of back to father and this can be done for more generations providing you are taking the best and seperating out undesirable traits.
Yes, we've had our share of "dog flippers" in our area. We have a couple animal rights group that will publically verbally go after these people if they see their ads, so we usually get an idea of who is doing it.
Funny thing. I can't invision myself killing an animal, but I'd probably change my tune if I had something going after my chickens...lol I was talking to my father the other day about predators and made the comment that when you raise chickens, loosing one here and there to predators is to be expected and that if you can't handle the loss then you have no business keeping chickens. I looked at my son and said, "Right? We can handle it if something happens and a predator gets a chicken, can't we?" He as serious as can be says, "Yup, but then we are gonna kill that animal that gets our chicken." lol