I come from the dog show world and pet quality means just that. They will make a really nice pet, but should not be used for show or breeding.
Anyone in the dog show world who thinks that their whole litter is pet quality, is very inexperienced. Usually when breeding a litter, we will get a few show quality puppies, the rest are pets. Sometimes it is only 1 or perhaps none.
Pet qulaity is a horse with enough flaws that it will not be able to do well in the show ring, let alone in the breeding shed. I am one who feels that if they can only do partially well in the local show ring, they are not show quality. They have to be able to hold their own at the National level ( I never sold a dog as show quality if I felt it would only do well locally. It had to be National quality to be considered show quality)
There is more to a show horse than straight legs, good bite and not being heavy boned. Unfortunatly, most people feel that is all you need to make a "good horse".
It takes years to learn to see a good shoulder layback, shoulder tie in, or a deep hip. If the shoulder is not laid back correctly, then the horse can not be up headed. The neck needs to be tied in correctly, not come out of the lower chest, but out of the shoulder. The throatlatch needs to be refined and not thick. The neck should also be as long and refined as possible. The head should be pleasing to the eye with large eyes. The topline should be level and straight with a high tail set and a large deep hip. Many of the horses today have almost no hip with a drop off and a low tailset. There should be some anguation to the back legs and some substance between the legs. Not too much, but too little gives us a "slab sidded" animal. (too narrow between the legs) This is not considered refined, but slab sidded and poor conformation. Refineness comes from the bone structure. You want to see a very refined bone structure in a weanling. If it is heavier, the foal is going to grow up to be coarse.
Pet quality horses should NEVER be bred as they will continue to throw their faults on to their get and continue to perpetuate the excess amount of unwanted, poor quality horses out there. It costs as much to feed a pet quality horse as it does to feed a good one. With this said, EVERY horse has faults. There is not a perfect one out there; and too, beauty is in the eye of the beholder. But while breeding to improve the breed, one should educate themselves to what is considered a good quality horse and strive to produce it, or not breed at all.
Even the best of breeders are going to produce the pet quality horse out of top winning horses. Just because you breed a World Champion to a World Champion, does not mean you are going to have all World Champion foals.
Also, too many people go flocking to the lastest World Champion stallion to purchase its get. I guess they figure if the sire is a World Champion then its get must be fantastic. Again, if you do not know what you are looking at, you could end up with another pet quality foal (that cost you a lot of money too!!). It takes two to tango, and the mare is 65% to 75% of the foal. So, if the stallion is bred to an inferior mare, the resulting foal will not be show or even breeding qulaity.
Yes all horses can be pets,(show or pet quality). But why breed for pet quality? What are you doing to improve the breed that you"love" if you are continuing to produce only Pet quality foals?
Not all are going to find loving homes. Then we end up with the same problem we have with cats and dogs. Only with horses, there are no shelters to take them in, so they starve and suffer. Everyone does not need to "make a baby"!! And the worst part is, it is the animals that suffer for the overbreeding.