In theory, quality wouldn't have to be sacrificed. The efficiencies gained from construction/assembly in a dedicated facility would be what reduces costs and increases production.

Mobile homes have a poor reputation, but that's not inherent to the concept of off-site construction. Of course I suspect "unique" one-off on-site homes will still enjoy a certain prestige, combined with increasing competition in the off-site construction space, probably leading to some cost conscious shoppers for these homes.