Actually, what you are describing is the correct temperament for GSDs. They should not make indiscriminate friends, and should prefer their family. The breed standard calls for aloofness with strangers. Generally, our GSDs adopt one person as their preferred “owner,” even though there may be a lot of people/kids in the immediate family.
One of our dogs several years ago “adopted” my wife, and while he was in his teenage months (say 10 months to about 20 months) you had to be careful with him when my wife was around, especially if he didn’t know you. He didn’t like anyone around her but me. But he outgrew/learned that it was okay for people to be around her, and tolerated it with no problems. But he was always watchful. My wife and I just knew that if anyone ever even attempted to do anything to her that he didn’t approve of, he would take matters in his own hands. It was comforting to know that you had a dog that was capable of making correct judgments on certain situations, and could be relied on to react correctly. A well bred and well trained GSD can do things that most people aren’t aware of; and they can be better judges of character and intent than a lot of people.
Very good dog, and was a very good breeding dog.
I absolutely agree. Shepherds are so intelligent. My SIL and her husband had to start spelling words around their dog...she once told me, "I swear I think he's beginning to figure THAT out, too."