Something I've seen is that when family gets promoted without earning it, they sometimes stop trying to get better. Like, if you know you can't get fired, why bother mastering the finer details of the work? It slowly lowers the standard everyone expects. I've watched shops where the owner's kid half-asses projects because there's no real pressure to excel.
You mention "no real pressure to excel," but sometimes that family name is the biggest pressure of all. I've seen kids work twice as hard to prove they belong. It doesn't always lower the standard, sometimes it just changes the reason for the work.
Wait but have you considered that family might actually try harder? If your name is on the building, every mess up is personal. I've watched a cousin clean bathrooms after close and redo orders for free, stuff hired guys would never bother with. That deep care can push quality higher, not lower.