It is possible that your Blue Heelers ears are hardened because of the chronic infection, not because of the Prednisone. Have you looked into what is causing this recurrent infection? Does the dog have signs of inhalant allergies or food allergies?
There is not a good medical substitute for prednisone, and, as you are noticing, the drug has a lot of side effects. The best chance for your dog is to determine what is causing the infection to come back and fix that. Consider trying to change his diet first.