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Finally, Loki's barking is not for lack of exercise. Like I said, he is reactive.
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As documented time and time again, about 99% of "reactive" behavior problems stem from a lack of exercise and/or leadership. As the old saying goes, "a tired dog (both mentally and physiclaly) is a well behaved dog". Unless there is a medical problem, the key to preventing reactive behavior is exercise, leadership, and affection (in that order). So when a dog is reactive, the dog could be well-exercised but not be recieving enough leadership and assertive energy from the human.
To get back to the original debate in this thread, a dog spending two-thirds of its life in a crate will cause reactive behavior like observed in Loki. For all we know, the crate may have contributed to Loki being hyper reactive (perhaps he was kept in a crate for long hours by the breeder or previous owner). But either way, dogs cut off from stimuli will end up with reactive behavior.