Is a proper wire coat easy to lose with careless breeding? After looking at many pictures of old terriers from 50-100 years ago, it seems they've gotten much 'woollier' than they used to be. For instance, the old Wire Fox Terrier looked like it had a coat very similar to a JRT in it's earliest days, but now it seems much longer haired. Is it the result of breeding for 'beards' and other points other than a natural short, hard coat?
Yes, you have it exactly..
A really hard coat that sheds water and briar is what you want on a terrier in cold country. A hard coat is somewhat brittle, and the hairs will naturally break off if they get too long. Dog show judges, who generally have NO IDEA what is actually important in a working dog, generally judge on all the wrong things. Chest size alone is more important that everything else that can be judged in the ring, but one of the few important visible things you want in a working dog (other than chest size) is a decent coat. A long curly coat is a soft coat, and a soft coat cannot shed water, ice and dirt like a hard one. I much prefer a good smooth coat to a woolly coated dog.
The best coat on a working terrier, in my opinion, is what is called a "slape coat." Not sure of the origins of the word, but I have been using it for more than 25 years and everyone who works dogs in the UK knows what it means as well. It's a hard coat, and pretty short, and it lays down with hard guard hairs on the outside. You will see it on a good working Patterdale or Fell and sometimes on a Jack Russell of the right sort. Border terriers often have terrific slape coats, but we are seeing those get ruined by the ring as well.
I put coat a distant second to chest size in importance when looking for a working terrier, but when you are out foxing and the temperature is 15 degrees and its 20 mile-per-hour winds, you want a coat that is hard, and which the wind and water and ice cannot blow through. A linty coat or a long and woolly coat will generally not do. A working terrier has no "furnishings" at all. In fact, if you ask a working terrierman about his furnishings, he will show you his couch!