Makes complete sense to me. Fender has immense cultural cachet among multiple big-spending demographics: blues boomers, Cobain disciples, indie kids, even the hair metal guys via Charvel. The Gibson/Harley-Davidson move of leveraging a company that makes stuff into a lifestyle brand is the play here. Fender would rather throw legal weight around to execute that than compete by building high-quality guitars at a good price.
Too many Clapton lawyers have gotten hip to boutique builders. Fender would rather make them buy a $5000 Masterbuilt Custom Shop Deluxe Roadworn Heritage Double Relic No-Caster than a Tom Anderson or Suhr. Same for kids buying Harley Bentons and ESPs - a $1000 Indonesian-built instrument is their future if Fender has anything to say about it.