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I just got off the phone with my cousin, and she has a 1992 500E. She loves her car, and except for a W211 E55, probably wouldn't trade it for anything. That said, she does have some interesting observations about W124 "quality:"
1. She finds the interior materials the best of any car she has personally been in. The leather is cracked and faded, but this is a 12 year old car. Other than that, it looks like new inside. She has had ML and W203 C-Class loaner cars, and finds the interiors much more modern, but don't look as robust.
2. She has had many expensive repairs, many more than the Japanese products she has owned. This, to her, is not a quality gap, but the price she has to pay for owning such a car. She did think she would be disappointed if she had to shell out the same operating dollars for a C-Class or other "normal" MB. She is also disappointed at the inability of the dealer to diagnose problems given that the driveline in the 500E is not a unique set-up, but also found in other models.
3. She would like the 500E to have better electrical components. Her old Honda had power toys that didn't break, and so should the Benz. She has had issues with the sunroof, rear windows, seat heater switches, blower motor, cruise control, and the ACC PBU. The reason she is angry about it is that even after being repaired, they break again quickly. The dealer is quick to blame her when she asks that question. "Don't let snow get on the car, as that wrecks the blower motor." Huh? We live in CANADA, MORON!
4. She also wonders why the car runs so hot and has barely-adequate AC. She spent part of the summer in Arizona and Nevada this year, and the car ran very hot, and the AC struggled to keep the interior cool. It's fine in Canada, but she wondered if MB engineering was all it's cracked up to be.
Now, the great thing about Jan is that she is a realist. She paid about the same for her 500E as you would for a new Accord, but understands the age of the car, and is willing to put up with that. She doesn't expect it to run precisely like a new car. However, she is right in her expectation that what gets fixed should stay fixed for more than a few months. The real question is who's fault that is. Is it MB's or the dealer's?
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