OK, short version of this.
Male parent - traits for legs X= longer O = shorter
Female Parent - Same traits.
They BOTH have the vaiability to produce either shorter or longer legged offspring. Their offspring have the possibility of:
1 XX
2 XO
1 OO
If you are breeding for a shorter legged animal, you select those that are OO and breed them to produce the traits you wanted. In doing so, you have specialized them, removing the variability. There is NO more X trait, a net loss.
So if all the chihuahua info is available in the wolf, and the traits combine as you say, how come we never see any chihuahua-sized or dachshund-shaped wolves?