While I agree "ruining the brand" is too strong - within the US Mercedes has a far-narrower definition. We don't have the widespread use of a-segments, utilitarian etc... the TV ads to this day still portray Mercedes as the expensive muscle car of the expensive cars... breaking chains, paint pealing, smoking tires.
Both their and BMW's old tries at cheaper entry level were failures and they did harm with the luxe images that had been crafted here in the past.
Keep in mind, threaks like this, however, are mostly fanbois and they're going to scream more than most. Folks interested in improved coilovers don't generally like being associated with hybrid-electric wind-up toys from Merc.
That is where you might be wrong. While sales of the the 318ti hatchback in the US sucked, that was more due to the itty bitty 4 cyl engine that it was stuck with. GTIs and hell even Civics stomped that poor thing. BMW's 1 Series, while scoffed at by some when introduced is actually a success. BMW learned their lesson and put a proper engine in that car
Laugh at the C class but it is the most successful car MB sells. And if I am not mistaken, the new CLA is below the C class on the MB totem.
You're right. I know that I could give a flying fuck about "lux" as I lean more towards the sporting side of cars.