I don't really get what you're saying here. Of course the "big breeders" don't kill their ugly hatchlings -- that would be asinine. They also don't market them as any less suitable for breeding, but you can't get around the fact that ugly animals generally (though admittedly, not always) produce ugly offspring, and vise-versa.
All people are saying is that a pretty animal of a given morph is always going to command a somewhat higher price than an ugly animal of the same morph -- regardless of who produced it ("basement breeder" or "big guy"). Sure, there are big names who sell some ugly examples of given morphs at inflated prices, and they'll get that price, thanks to their name. But I still think that "Basement breeder A" with a gorgeous, bright yellow pastel will be able to sell it for a higher price than "Basement breeder B" with a dirt-brown pastel that looks little different from a normal.
I agree with you though -- ultimately, for the most part it's all supply and demand. Otherwise, the piebald (which has been around a LOT longer than the pinstripe) would've plummeted in price just as fast as all of these co-doms.