The funny thing is when they launched satellite radio, they marketed it as "CD quality." Not any more.
The original game plan for XM was 35 music channels. Period. The audio would have been fantastic. But then reality set in: Content is king, and XM -- joined after a year by a competitor, Sirius -- eventually launched with more than 35 music channels, but also a bunch of news, talk and sports channels along with simulcasts of TV audio. Then came the sports play-by-play deals, the Canadian channels, the FCC-mandated minority set-aside channels, the traffic channels, bandwidth set aside for geonavigation and the huge flop known as Backseat TV. That's why the audio sounds the way it does today. A smoke-and-mirrors technology known as hierarchical modulation allows even more channels to be squeezed into the limited bandwidth, but that only hurts audio quality more.
But again, that doesn't matter to John Q. Listener, tooling along in the noisy front seat of his 12-year-old car with worn shocks and a bad muffler. So long as he can tell that it's "Free Bird" playing and not "Uptown Funk," the audio quality is perfectly fine.
PS -- Yes, audio quality played a big part in the exodus from AM to FM, but those listeners weren't leaving for audiophile-quality audio, they were leaving for punched-up, too-bright, ultra-compressed FM audio, with the music pitched higher and faster for good measure. Better than AM, for sure, but nobody would ever call it high quality. But that's OK, because nobody cares.