Unfortunately I don't believe Lionel quality issues are solely confined to the "low end starter sets" (not that I think it should be an excuse). Recently I purchased two recent vintage Lionel sets (Amtrak HHP-8 and conventional classics hudson passenger set) through the forum from respected members here -- both sets were new in the box, original wrapping, etc. so the sellers were honest and I don't attribute any of the issues to those folks. The sets were Christmas gifts for my kids.
Both sets had multiple issues. On the conventional classic set, the screw holding the truck in place on the tender was too long, contacting the center rail pick-up on the truck below when that pick-up was depressed by the weight of the tender, thereby causing a short circuit. On the locomotive itself, the front truck has a retaining slip ring that slides on a tab attached to the underside of the chassis, under the loco in the vicinity of the cylinders. It looks like it is designed to prevent the front truck from sliding around too much. However, on this loco, it was so tight the front truck couldn't articulate properly, and I had to loosen it with pliers, bending it down a touch. Otherwise the locomotive would derail on every turn. On the 2400 series passenger cars, two of the cars had couplers that wouldn't close and stay closed due to insufficient spring pressure on the tabs. On the Amtrak set, one of the coaches had wiring that mis-routed to the truck, causing the axle furtherthe coupler to rise up on the turns -- because the wiring would "bunch" up and push the wheels in front of it down, elevating the body of the car and causing the car to derail. And for some reason, the locomotive itself will operate correctly in command mode but when we use the CW-80 supplied with the set it will not cycle through as it should in the F-N-R pattern. For now, I'll leave that be . . . .
As a relatively experienced train guy, all these problems were things I could handle
and repair on Christmas morning, the hardest part being the kids obviously being impatient and understandably so. So none of it was the end of the world, and every manufacturer can have issues. And I've been a Lionel customer for 35 years, so I root for the company and want them to succeed. I've met some of those guys at the shows and I like them -- they are enthusiasts and I think they have good intentions. But at the same time, stories like this one on the PE starter sets cannot be excused because these sets are, frankly, ambassadors to the hobby, more so than any other starter sets out there. And while they have to be marketed to a price point to sell, they do need to get the basics absolutely correct. Kind of the way Honda or Toyota may use some cheesy plastics in the interior of the car, but the car will basically be "right" -- it will hold up and be reliable. So as train enthusiasts I think we have to have perspective, but we cannot excuse shoddy quality. And in my mind, the driveline on these locos has to be one of those things that is correct. Save money somewhere else, the kids won't know the difference on certain things but if it doesn't run, that they will know.
Just my .02.