Hi all, new to the forum but wanted to add some info I had.
I have been collecting LEGO fairly religiously for about 15 years now (not counting the 10 years prior I spent 'playing' with it

), but I am one of those types that leaves it in the box.. sealed.. so I haven't had the best view into how the quality has evolved (devolved) over time... the collection I have amassed will be a good historical record though (if ever opened). Some recent experiences and then the discovery of other people discussing the issue with the 'red' coloring have led me to here.
My first signs of degradation in quality of product was when the boxes all turned single ply cardboard and international versions started appearing with multiple languages. The boxes also lost the plastic moldings and clear windows used to 'display' pieces of the sets when you opened the flap of the box. This would have been done in the late 90's early 00's is my guess. They then started bagging the LEGO differently and splitting the kits/instructions.
My first solid concerns with the LEGO itself was with the Ferrari Technic model which is essentially all red. I bought this for my brother, and him being normal opened and assembled it. I was shocked to discover the quality of the red used. The body panels comprised of about 4-5 different variants of red, this was _definitely_ not the LEGO I grew up with, and definitely not the LEGO I thought I was collecting. I shrugged this off as perhaps a quick franchise set made on the cheap so didn't think much more of it.
Fast forward to about a week ago, I was in the LEGO shop of Legoland Denmark and I found the vintage mini figure collections, and immediately I could tell there was something severely wrong with the red.
Interestingly my Vintage Minifigure Collection Volume 1 doesn't seem to suffer from the red problem, the classic space man seems fine. (-edit-, just read someone saying it isn't.. will have to check my set again!).
Volume 2 - The pirates hat appears to be the correct red, but has a molding mark but both the Ninja and the postman's shirt are definitely the lower quality red
Volume 3 - Only 1 small piece on the soldier that is difficult to tell
Volume 4 - Knight has the low quality red, santa has low quality red body, but correct colored hat and the feather in Robin Hood's cap appears to be the low quality red
I also noticed that on a lot of the loose bricks in the 'pick and mix' they showed molding marks. This is definitely not something I would expect from LEGO, and to me shows that the quality is really slipping, even in the LEGO homeland!
I also looked closely at the battle packs, tic tac toe and chess sets (planning to send them home) and all had the horrible translucent red all through them so I won't be touching them. Comparing the 'new' generation battlepack Pirate LEGO to the original would scare a few people I think.
When in the LEGO shop in Hamburg they had facility to create mini figures. Most of the components were made of what felt like lower quality plastic and also had the translucent red legs and torsos (red used in hard hats seemed fine). They also felt rough in texture on body components that felt very different to what I was used to. I decided that this was likely due to the nature of what was being sold (tubs of pieces, sold en-mass).
I also dropped in to Legoland Berlin. I picked up some more LEGO here, namely the santa clause keyring. I didn't pick this up because I like santa clause, more because I was amazed it was using the good quality red from top to bottom in stark contrast to the santa in the Vintage Minifigure Collection. You can put the 2 minifigures together and they are like night and day! (obvious when comparing the legs).
That is all I really wanted to add. I sadly have the proof of inconsistency I thought I would never see from someone like LEGO. Not only has it left a bitter taste in my mouth, but I am gravely concerned by how much more the quality will slip.
As for the comments about LEGO needing to do this to stay afloat.. I seriously don't think so. I have been collecting all through the time when LEGO was going through an extremely rough patch (posted loss for the first time) and they made some seriously bad decisions which they can only blame themselves for. Think of all the Lego PC games when they branched way too far from their core business, the 'Galidor' series of sets (I have half of these and they are absolutely atrocious). I personally think it was because they completely lost focus of why people bought their product in the first place.
Since then it appears they have franchised heavily to stay afloat, that is what saved them and is pushing them and their profits forward. Franchise deals such as:
NBA, NHL, Star Wars, Indiana Jones, SpongeBob, Discovery Channel, Bob The Builder, Spiderman, Ferrari, Lamborghini, Dora the Explorer, Thomas the Tank Engine, Batman, Harry Potter
I think it's only in the last few years with the cash raised from franchise deals that LEGO have really refocused on their core business which is making some seriously good non-franchised LEGO in their own 'universe'. Space Police, the new range of City, Castle, Pirates, Vikings _Massive_ Technic sets like the Bulldozer (Bring back Model Team!).. they should have sustained this all along.
For me, LEGO cutting the quality and losing consistency is spitting in the face of purists to make a few extra dollars. They know the 5-12 year old age group won't care what the consistency of their injection molding or red dye is.
True I don't have to buy it but I don't think that really lets LEGO off the hook for cutting corners when reliability and quality has been their hallmark for so many decades. If I can't be 100% sure that what I am buying is top quality, why risk my money?