Whatever company has owned the name has been "diluting" Schwinn for like forty years. By the 1970s the phenomenon of "real Schwinn" and "knock-off Schwinn" was well established, and when Schwinn-the-company hit really hard times in the 1980s the phenomenon accelerated.

I wouldn't be at all surprised if revenue on licensing the name to knock-offs far exceeds what has been earned from producing high-quality Schwinns.