If decline in service goes up, the people at the top most definitely feel it. It is actually multiplied by the fact that it is consolidated. So it is exponential.

The problem with ->big<- PEs is that they usually do not care too much. They usually have 5y exit plan, no matter what. If they are managing other people's money, like pension funds and whatnot, they usually do not care because they already got their fees. So yes, it can become a problem over time. Large PE firms simply gobble up every good deal they can so it is quantity over quality. But then, this can happen with small shop anyway. With PE it might be more exaggerated due to the scope but that's just the market. It bares what it financially can and it does not matter how big or small a business is if the management is lacking.

But even big PE firms can be good managers. So again, it is circumstantial and not something that can be generalized.

There are always bad apples. But those apples, once they make their bad name, they will go out of business sooner or later because other people will know of them and to avoid them.