I think what OC was getting at was how some animal breeds are bred with very limited groups to maintain desired bloodlines/genes. This leads to health issues due to inbreeding.
Pug dogs are a somewhat common example; same with a lot of 'pure bred' dog breeds.
I'm not sure how much that applies to sphinx cats.
It can be done ethically, with a sufficient gene pool. It can also be done cruelly; especially when profit is involved. I can't say I have much faith in it being done ethically... But I'm sure there are some alright groups out there.