Any industry or sector will have both fabulous and horrible examples of treatment (of clients, employees, and in this case, charges) and facilities. That is why we have government regulations on just about any and every sector.
The problem with PETA's "statement" is that it is an overgeneralization and exaggeration in most cases. No Kill shelters adopt that policy because they believe it is the best thing to do. "Kill" shelters hold a different view. Neither one is 100% right or 100% wrong (as purported by PETA). They both have their place, and hopefully with more states implementing low-cost or free spay/neuter, and passing laws that require all animals that are adopted out from shelters be spayed & neutered prior to leaving (the voucher system just plain doesn't always work!), the No Kill model will eventually become the working rule rather than the exception.
The other problem that our entire system has is the major in-fighting amongst those organizations that are supposed to have the same goal. There is so much finger pointing and name calling between No Kill and traditional shelters. That's evident from the quote they used from the Virginia Beach ACO, which is, sadly, typical. The really sad truth is that we are simply not ready to be a fully no-kill nation, although that SHOULD BE the goal! There are too many companion animals, too many ignorant or just plain stupid people who think it's OK to let their moggies and mutts breed. Too many good hearted people who want to help those strays & ferals in the neighborhood, so they just put out food without TNR, which gets the population healthy enough to have a high reproduction and survival rate. Now they are overrun with adorable kittens that are fairly tame...so off to the shelter they go where the people are sure they will be adopted into good homes because they are SO cute!
We get complaints, on the boards and privately, because TCS and our wonderful members take such a hard stance on spay/neuter unless the cat is in a responsible breeding program. And because our definition of a "responsible breeding program" is pretty tight. Any small bit of research and half a brain makes these stances obvious. And we hope and try to educate every person who comes here as to WHY it is so important to S/N, and hope it sinks in...
Sorry to ramble on. This topic is an emotional one, and I've done so much reseach on it for Stray Pet Advocacy that I really can see both sides of the traditional vs. no kill debate.