It is very unlikely that German shepherds have a statistically significant component of European wolf blood in their veins. Recent exhaustive DNA analysis provided some startling revelations.
Wolves were domesticated only once, in what is now China, about 11,000BCE. This process was never repeated. All domestic dogs have the genetic markers of the wolf population that still lives in that region, not of any other populations of wolves. (It was a process of voluntary self-domestication, but see my many postings on other threads for a larger treatment of this topic.)
Dogs and wolves are a single species. There are more differences between the DNA of a Pekinese and a mastiff (or between a Norwegian man and an Indonesian) than between the average mongrel and a wolf. The major difference between the two subspecies of Canis lupus lupus and Canis lupus familiaris is behavioral -- one that has been selected through thirteen thousand years of voluntary and captive breeding.
The earliest differentiated breeds, created when man mastered the art of animal husbandry around 8,000BCE, are an unexpected lot, including the Lhasa Apso, mastiff, Pekinese, saluki and Maltese. Livestock guard dogs, hunting dogs, and a whole lot of little pet dogs.
Most of the dog breeds are far more recently developed, a vast percentage less than 200 years old.
So it turns out that my Lhasa Apsos are more closely related to wolves than your German Shepherd. But I'll make sense of that in a moment.
The behavior you are talking about is primarily a function of the alpha gene. In the dog population in aggregate, about one percent of individuals have it. It's much more prevalent in wolves, who run in smaller packs than feral dogs. It's not a trait that is desirable in most human-dog multi-species communities, so the alphas either chose not to live with humans in the first place, or were culled from the domestic pack.
In a few cases it was desirable and it was selected. One is the Lhasa Apso, developed to guard Tibetan monasteries with little human oversight. You put a pack of Lhasas around your house and nobody gets through. Lhasas fight among themselves like alligators. We breed them and we're always treating wounds in our pack. Turn them loose and they scatter to the winds, rather than following a leader. They regard their humans as really nice roommates who buy all the food, not owners. We sell a lot of them because they appeal to cat people.
Another is the pitbull, developed to fight other dogs. A hunting pack only functions smoothly if the authority of the leader is respected. If everyone is willing to fight for dominance, too much energy and blood is wasted. Few dogs can be trained to fight to the death. They must be both alphas.
Most other breeds, even hunting dogs and herding dogs, but especially working dogs and pet dogs, were highly selected for beta personalities. They instinctively accept the authority of the human as pack leader, and don't fight too violently among themselves to decide who is number two.
German shepherds were originally bred to herd livestock, as the name implies. The last thing you want is a dog with a tendency to fight, he's likely to take on the lead sheep or goat and kill it, as many gentlemen farmers have discovered to their chagrin when they put a spike collar on a random monster dog and tell it to watch the goats.
It was only during Germany's dark days at the end of the nineteenth century and the first half of the twentieth, when German shepherd bloodlines were opened up for personalities that could be trained for tasks that no self-respecting farm dog would consider. This wasn't all bad, they became good rescue dogs, bomb sniffers, medical supply carriers, etc. The conquering armies recognized their value and took plenty of them home, making it one of the world's most popular breeds.
Nowadays German shepherds are still used for guard duty, but it is not considered their primary occupation. They are still classified in the "herding dog" category in dog shows, meaning that a docile, beta personality is more likely to be respected than a wary or aggressive dog.
The same fate has befallen other breeds. The rottweiler was originally developed in Roman times to pull carts in mountainous country where horses weren't appropriate. This was obviously an extremely docile, patient dog that would put up with considerable abuse without attacking another animal or a human.
Anyway, the alpha gene is out there and has not been completely eliminated from the bloodlines of any breed. It's easy enough to select for in a species that can reproduce at one year old. Dogs that display alpha personalities have simply been bred for it, almost always without the need to violate the rules and introduce DNA from other breeds or from wolves -- the earliest breed of dog.
