I have no problem with kennels, good breeders often keep their dogs separated in kennels, You don't want dogs breeding willy-nilly.
However, I'm confused about the kennels, what do you mean "out back", are the outside? Or are they in a space that can be air conditioned and heated? Yorkies don't have a double coat and can't warm or cool themselves as well as other breeds. Are the dogs let out and allowed to exercise regularly? Show dogs aren't pet dogs, they are working dogs and really need to obey their owners and so sleeping with the dog you will be showing is a big no no among breeders, however the kennels should be in a place that is comfortable enough for a human to live in.