I keep bars on the horns of my goats who can get through the fence. (Need to add them to the doeling -- her horns are growing and beginning to stick.) I don't worry about my dog, but feral dogs or even wandering pets can kill livestock. I would hate to come home and find that. I'm so sorry you had to go through it.
I have to agree on the breeding of the dog as a shepherd. I've raised and trained GSDs for years. While they do have a predatory instinct, it can normally be managed. I've kept GSDs with kittens, goats, chickens, parrots and small birds, puppies, small children, and babies. At times my dogs have been "provoked" and I was afraid something could happen but they NEVER attacked.
However, when a dog is TRAINED to attack, you must overcome his natural inhibitions against attack. A dog that is trained to attack can be a real legal liability. If you were to command him to attack, if he is properly trained, he should do it, no matter how inappropropriate the circumstances.
I thought about it a lot. My final choice was to select dogs that were naturally protective, but not to train them to attack. That is what worked for me. I'm not telling you what you should do, just pointing out that with that kind of training you are dealing with a slightly different animal. But, still. If it were me, I'd definitely work with him to NOT attack the goats. That should be do-able. If you DID have a dog whose natural attack inhibition was wiped out, and then you couldn't train him NOT TO attack -- well, you'd have a very dangerous animal.
Fencing is good, but as you said, the bars on the horns are an immediate fix. And won't leave them vulnerable to OTHER dogs as in the case if you only fix the fence shared with the dog.
My current GSD is only 15 months old, and a bit more excitable and slower in his training than the dogs I had before. He did want to chase the chickens and REALLY wants to herd the goats. But when a goat puts a head through the fence -- he only wants to lick it's face.
Mostly he just herds cats.
I do hope you find a solution that works for you. And I hope you are able to work with your dog and that he is trainable and manageable.