In the first scenarios listed above the dog often becomes spoiled, pottying in the house, chewing favorite items, often becoming aggressive toward others in or outside of the home, etc. This dog will continue to act this way into old age without any intervention.
In scenario two the dog is constantly being yelled at possibly even struck when it misbehaves. This may cause a seemingly "good" dog as it does listen to its owner, but mostly because it wants to avoid pain. This dog will never have a positive loving relationship with their owner, only one based in fear.
When positive training is introduced early all negative scenarios can be avoided from the start. A well trained dog behaves because it loves you and is motivated to please you, and gets rewarded with love, attention and often goodies. With positive dog training methods you can have a dog that listens to you, and one that cares for you. This makes for a great relationship between Owner/Pet Parent and Dog!