I realize this is fairly nebulous, but /r/guitar wasn't able to help me. The obvious issue is: what exactly constitutes shred guitar? I'd like to draw your attention to this Deep Purple video, particularly the passage from 3:00 to 4:00. I love this part because it has everything: neoclassical picking, sweeping, dive bombs and bluesy pentatontics all played with distortion - all key elements of modern shred. The most important point is that this video is from 1969, so if you want to be a contender for a modern shred pioneer, you'd better have done it before this. In other words, I claim that modern shred is "at least" that video. My question is essentially: are there any earlier examples of all or most of the techniques seen here (they don't have to all be in the same song or performance) or is it safe to say that Ritchie Blackmore invented modern shred?
If we're defining 'modern shred' guitar as 'doing all of neoclassical picking, sweeping, dive bombs and bluesy pentatonics all played with distortion', the earliest person to use such techniques at the same time will quite likely have done so about 1968 to 1969.
Musically, rock guitar bands with the inclination to supplement typical blues or pop idioms with musical forms considered more highbrow (classical or more arty forms of jazz) start to appear around 1966-1967 - most obviously this includes The Beatles' Sgt Peppers album, and other albums of the era like the Moody Blues' 1967 Days Of Future Passed, which was recorded with the London Festival Orchestra. This trend coalesces into a specific genre/movement, progressive rock, by 1968-1969, with bands like The Nice, Yes, King Crimson etc.
It's in this progressive rock movement that you see rock guitarists transplanting classical techniques to electric guitar (e.g., neoclassical picking), where previous lead guitarists mostly used techniques in solos derived from jazz, country and blues (e.g., the bluesy pentatonics and divebombs you mention). Deep Purple, in 1969, were very clearly part of this movement - for example, they released an album recorded with the Royal Philharmonic Orchestra titled Concerto For Group And Orchestra - and so it makes sense that their guitarist Ritchie Blackmore would employ a mix of rock and classical techniques.
I'm not sure if Blackmore would have been the first to 'shred' - it's possible - but it very likely will be either Blackmore or another guitarist in a band with progressive rock inclinations circa 1968-1969.
The earliest I could find was this video of The Who from 1965, where Townshend starts shredding around the 6:30 mark. There were elements of shredding in electric blues dating back to the 40's, or even acoustic blues back to the 20's, but this is the earliest video I know about putting everything together.