Steve's worst foe, the shoe goblin ardently defends shoes whenever he comes against one who is disrespectful of them. Generally, this retribution is delivered in the form of a shoeing of epic proportions. The shoe goblin is especially defensive of tiny shoes, as seen in Comic 34.
The attacks on Steve impact him psychologically so much that he has dreams about the shoe goblin, as seen in Comic 36.
The first mention of the Shoe Goblin (in Comic 11) seems to indicate that Beaver thinks he is one of Steve's imaginary friends, but this opinion seems to have changed by Comic 98, when Beaver himself acknowledges fear of the Shoe Goblin.
The Shoe Goblin's obsession with shoes seems to run in the family; eons ago, his ancestors built a giant shoe and sealed it inside a shoe-themed temple.
When the mutated Rupert T. Roach was destroying the city, Beaver and Steve tried to join forces with the Shoe Goblin as shoes were a roach's greatest fear. It was at that point (in Comic 63) that the aforementioned Master Shoe was revealed. However, the Shoe Goblin still managed to double cross Beaver and Steve, fueling their mutual hatred even more. And as if that weren't enough, he was soon (in Comic 65) also proven to be cooperating with Pandas.