"...How do we know that selectively breeding for niceness doesn't affect feeding or breeding?..."
Actually, those are 2 other examples of "us" manipulating "what's inside" the animal for our benefit. For example, when I first starting breeding wild caught Miami phase corns MANY years ago, many of the babies insisted on starting on anoles. After many generations of selective breeding, I can say that Miami babies in my lines are no more likely to need anoles than other corns in my colony. And over the years, I (as most breeders) have certainly chosen to keep back the most productive breeders, increasing productivity over the generations. Poor producers were sold as pets, unless they had some one of a kind trait that needed to be perpetuated.
So, yes, productivity, feeding, personality, color, pattern, etc - all are subject to human manipulation in domestic animals, whether it is a dairy cow or a pet snake. I don't see how changing one aspect for our benefit is better or worse than changing others - unless, of course, it produces negative impacts to the animal, such as shortened noses on Pekingese dogs and Persian cats that make breathing difficult. That would be something I would consider unethical to produce.
However, if you personally find something unethical, but would breed it anyway just for money (as paltry as it is these days) or for the fun of creating it, I don't think that would be a good thing to do. It would make you feel guilty for doing so, even if most others don't find morph making to be unethical.
