If the device is nonfunctional, and has encryption enabled (e.g. Bitlocker or FileVault) you MUST give them your password if you want it repaired and cannot afford to lose data. That is the COMMON CASE. A lot of shops/businesses aren't going to agree to a "stand over my shoulder while I work" clause least of all because your repair goes into a backlog until they can get to it.
> backup your data somewhere else, and wipe the device clean before handing it in.
Well over half the devices going in for repair cannot do that, that's why they're going in for repair.
> safe to assume that people who take their laptops to service shops know _nothing_ about security
Safe to assume that the people being judgmental online know nothing about the technical expertise of the average device owner.
I'd never take a device into somewhere with personal/sensitive information on it, but I recognize I am in an extremely privileged position in having the knowledge and expertise to do so. Even a fully broken screen wouldn't stop me from backing up/wiping. That isn't typical at all.