Even breeders who breed "ethically" have different ways of doing so.
Ethical breeders motives will be to improve the breed, they ensure they take health and temperament into account, they don't over-breed or force a bitch to have repeated litters, and they make sure their pups are well socialised before they go to their new homes. It is harder to achieve this if the dogs are kennelled, but it is by no means impossible
If the breeders ticks all the boxes in terms of being reputable, then it is your decision whether you are happy with kennel raised dogs/pups. I prefer home raised dogs, but if I couldn't find a litter that was raised indoors, then I would compromise on the kennelling, rather than compromising the health checks
I wouldn't necessarily take the word of the breed club representative as indicative of reputable, as they may mean "top breeder" to mean successful in the show ring; occasionally, a blind eye is turned to some less ethical breeding practice