You are halfway there. Before prohibition in America the go to drinks were beer, cider, and wine. When prohibition came into play people were charged NOT on how much alcohol they had on them but on the volume of the alcoholic beverage they had. Punishment for a pint of whiskey == punishment for a pint of beer.
So in other drug markets where it was a naive measurement (weight volume) that ignored the active ingredient drug importers and venders are incentivized to create stronger and stronger products as a hedge against getting busted.
Anecdotally a friend in Saudi told me that beer from the informal markets costs more than Johnny Black.
So while you are correct that quality does fall often in illegal markets arguing that they have no effect on the potency of drugs would be wrong