Yes, every slack is optimized out of systems. If something has an ounce more quality than would suffice to obtain the same profit, it must be cut out. It's an inefficiency. A quality overhang. If people buy it even if it's crap, then the conclusion is that it has to be crap, else money is left on the table. It's a large scale coordination issue. This gives us a world where everything balances exactly near the border where it just barely works, for just barely enough time.

True but there is a limit, there are still levels of quality

Nah, there is a quality floor that consumers are willing to accept. Once you get below that, where it's actually affecting their lives in a meaningful way, it will self-correct as companies will exploit the new market created for quality products.