I was surprised by the bit about Costco selling the outlet-tier trash. I don't currently have a membership, but I've generally understood their position to be quality at cost.
Costco has the same sourcing issues a lot of other companies have, they do spend a lot of effort on due diligence when sourcing Kirkland Signature brand products, but sometimes what they get in a production run ends up being something else, or there's unexpected issues with the products once the public gets them.