A dog can certainly be born "screwy", to not believe so would be to kid yourself. If a dog can be bred for a good temperament then why not a poor temperament? Some people make the statement "its all how you raise the dog" which seems very niave. By selective breeding is how we get varying temperaments within breeds. Some breeds are friendly to almost anyone, others are aloof, still others wouldn't at all allow a stranger to trespass. Some breeds bond with only one family member and others accept everyone. Some breeds are dominant and challenging who require firmer, consistant training, while others are submissive and are very easily trained, then their are breeds who are very stubborn and independent. If you don't cull the bad and select the good you get dogs that have genetic temperament defects.
How you raise a dog of course will also dicate its actions. If you imporperly raise or train it, then you can create problems too. But breeding definatly plays a role. You can take a dog with a great temperament and ruin it, but the same holds true for dogs born with a problem, you can take that dog and raise it correctly and still end up with a problem dog.
If you breed shy, skiddish, fearful dogs you'll likely a fearful skiddish pups. I've seen this first hand. For one I had a dog who's mother was like this and although I raised my pup right, socialized and trained her she was still fearful. Another example is a friend who's fear aggressive dog had a litter. First off her dogs parents were not right I came to find out. Her dog as a pup was the shy and not out going at all. She turned out to be a biter and a scared aggressive dog=fear aggression. She had a litter and the litter was already showing the same signs she did as a pup, they exhibited the same fear and shyness.
A lot of this bad breeding is by "accident", its not really an accident when you chose to breed a dog with a temperament problem, but most people don't think they are doing all that bad and think the pups will be okay. They don't see it as a big deal. Whats worse however is some people breed for an aggressive temperament whatever the underlying cause maybe, fear aggression, dominance aggression or dogs that just have a problem-physical brain development/chemical imbalance thats genetic. They want the baddest most dangerous dog and breed for this trait.