> And in the background of this something ominous: Companies can't just pivot back to higher quality after they've destroyed all their inhouse knowledge. (...) They can't move back upmarket after that's done.

The knowledge isn't the problem. It can be quickly regained, and progress of science and technology often offer new paths to even better quality, which limits the need for recovering details of old process.

The actual problem is, there is no market to go up to anymore. Once everyone is used to garbage being the only thing on offer, and adjust to cope with it, you cannot compete on quality anymore. Customers won't be able to tell whether you're honest, or just trying to charge suckers for the same garbage with a nicer finish, like every other brand that promises quality. It would take years of effort and low sales to convince the customers to start believing you're the real deal, which (as beancounters will happily tell you) you cannot afford. And even if you could, how are you going to convince people you're not going to start cutting corners again a few years down the line? In fact, how do you convince yourself? If it happened once, if it keeps happening everywhere around across all economy, it's bound to happen to your business too.