I respect everyone's opinions; mine is that the watering-down is a non-issue, especially as the tourney progresses. Since 1985, when the tourney expanded to 64 teams, the 16 seeds have a record of 2-160 (UMBC over Virginia in 2018 and Farleigh Dickinson over Purdue in 2023, which is perhaps the best argument for expansion, a chance to see an even lower-ranked team beat Purdue

).
Relatively few people watch those play-in games; heck, most brackets don't even begin until it gets to the Round of 64.
The history of expansion of March Madness is fascinating:
--1939-51: 8 teams chosen from regions
--1951-1975: 16 teams, and you had to win your league to get in. Runners-up in all other leagues were "relegated" to the NIT, which sometimes got more media attention than the NCAA Tourney because it was being held in the media capital of the world and had the second-place finishers from the major conferences. In 1950, CCNY won both the NIT and NCAA Tourneys. (Caveat: In some years before the next expansion, the NCAA had 22-25 teams because new leagues had been formed, but still no at-large bids.)
--1975: Expanded to 32 teams, including the first at-large bids. The popularity of the NIT was a major reason. In 1971, the NCAA passed a rule that if you rejected a bid to the NCAA, you could not play in any other post-season tourney. That's because in 1970 Al McGuire and Marquette turned down a NCAA bid over unhappiness with their regional assignment and went on to win the NIT. (Back in 1967, the Walt Frazier-led SIU Salukis turned down a NCAA College Division berth to become the first College Division team invited to the NIT. They won it by beating St. Peters, Duke, Rutgers and Marquette. Earlier in the season, they had beaten defending National Champ Texas Western and No. 2-ranked Louisville with Wes Unseld.
--1985: Expanded to 64 teams (though as many as 53 teams participated in some years between 1975 and 1985). Villanova, an 8 seed that finished 9-7 in the Big East, won the tourney and remains the lowest seed ever to win. It was the last year before the shot clock (thanks Villanova).
--2001: 65 teams, with one play-in game because the Mountain West started getting an automatic bid.
--2011: Expanded to 68 teams with 4 play-in games.