I don't think DVC started as Sears and is becoming Saks. DVC as a whole is not readily comparable to 4/5 star deluxe hotels/resorts abroad or even domestically. VGF/VGC however are
AAA 4 diamond and checks off all the 5 star requirements (concierge, decor, childcare, poolside drinks, service, etc). When we evaluate DVC solely within the WDW experience, we can see that all DVC properties are clearly in the deluxe category out of the 3 that Disney uses. None are glorified outside facing motels and all have one or more offerings above the moderate level properties.
That said, I think a lot of unhappiness and angst from people are the results of 1) how our society's standards have changed over the years and 2) how WDW prices have increased far above inflation/median wage. Families used to cram kids into a station wagon for roadtrips and stayed at roadside motels (yay free local calls, pool, and cable TV). WDW used to be affordable for families. Now days, the average stay for the average family is a $100-150/night 2.5-3 star level Holiday Inn/Homewood Suites/Staybridge/Hyatt Place, which has 99% of what most Americans would be happy with (fast wifi, plenty of wall/USB outlets, nice bathroom, comfortable bed, free breakfast/parking, etc). None of my friends/family see value to pay more out of pocket for a 1 star bump to a "nicer" hotel, in which one loses free breakfast/parking, and gain only nicer on site restaurant, room/lobby decor, and in some cases a club lounge). Yet, all DVC and WDW deluxe resorts are multiples of that $100-150 per night rate.
Imagine the same people visiting WDW and staying at DVC or any WDW resort. They gauge value based on how much more they paid per night (vs. their avg stay elsewhere) in return for how much more they're getting (theming, amenities, decor, service, etc). Needless to say, unless if everything they see/touch are in tip top shape and/or they get a healthy dose of pixie dust and friendly interactions from CMs, many will be disappointed. Much of this unhappiness and angst could have been avoided if WDW prices (parks, concessions, lodging) simply did not price things as high as the market could bear.