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Funny enough, this idea is a point I was thinking of but didn't post it. I realized that brand almost don't matter anymore.
The example I was thinking of was Banana Republic. At one time it was a higher end brand. It had modern styles with moderately high quality construction, but also came with a more premium price. Over time it started sharing lower quality fabrics and construction with lower end Gap and Old Navy diluting the Banana Republic brand. Then Outlet Malls happened and separate even lower quality lines were produced for Outlet Malls still bearing the Banana Republic name.
While I'm sure Banana Republic probably produces some higher quality items, I can't know by looking at the brand if I'm getting one of the good ones or one of the cheap crap ones. So I have to assume I'm getting the worst and would only pay appropriately for clothing with that brand on it.
Your example of Levi jeans is the same thing. Since the same brand is carried and multiple tiers of stores with widely varying quality and price, consumers can't differentiate and assume the worst.