Agree.As long as Mercedes doesn't cheapen the quality of design and parts to make a quick buck than I don't think so. If they slip on this front than I think ppl will have a reason to complain.
It won't water down the brand unless it's built really cheap and doesn't hold the same quality and everything else you expect from a Mercedes in it.
The closest thing it will to do "watering down the brand" is bringing in first time Mercedes Benz buyers that could only afford cars in the $30-40k range tops making not as desirable to own.