It's a channel thing. The sales channels for Shimano are so distinct that the twain almost never meet.

For one thing, the people who buy Shimano's better-quality stuff in bike shops have no idea about how low Shimano's low-end, XMart components really are. Conversely, the people who buy bikes in XMarts and sporting goods stores are usually just buying the coomodity BIKE -- they're not really aware that the bike is composed of comonents from different manufacturers. Consequently, when a Shimano component fails on one of these bikes, the consumer will be far more inclined to blame the BIKE manufacturer rather than the component manufacturer.

So Shimano is basically shielded by the different types of consumers in the different channels. It's also such a dominant company that it's not like you have much of a choice with MTBs and hybrids, anyway...