One of the things that is commonly misunderstood about the katana is the nature of its "quality". Japanese smiths worked with very poor grade steel compared to their European counterparts. In order to transform this poor steel into something as robust and durable as a fine sword blade, it required a phenomenal amount of labour and craftsmanship. Essentially, the flaws and impurities in the poor steel had to be evenly distributed throughout the blade to eliminate weak points that would cause bends or breaks under high impact. This required extensive hammering and folding, repeated many times, plus exotic pattern welding techniques to place the highly-worked steel in the most advantageous parts of the blade. And once you are investing that much labour into the blade, a small amount of extra artisanship around the fittings and scabbard is a minor investment, but it greatly increases the weapon's value as an objet d'art. The quality of a Japanese sword blade is in this incredible degree craftsmanship, but ultimately this craftsmanship existed to work around low-quality materials. So the "quality" isn't necessarily a reference to its capabilities as a pure weapon, but rather its quality as art.

By way of comparison, Viking blades were being contructed in similar ways hundreds of years earlier. But European steel smelting underwent a major advance somewhere around the 10th Century, and from that point good quality steel became much more common in the west. The thing about good quality steel is that it takes much less labour to produce a robust sword blade, so you saw a corresponding decline in the standards of artisanship. The incredibly advanced (and expensive) construction of the Viking era blades gave way to simpler, plainer, and more common blades. Much better quality as a practical weapon for the masses, but much worse as art objects.

Whereas in the early middle ages, swords were an heirloom object that was passed down through generations due to their sheer expense, by the Renaissance, swords were being produced in quantity for armouries and used by regular fighting men. These were good weapons, in the sense of being practical and deadly. Because they were comparatively cheap, they could evolve quickly, as well, and Western sword design changed very rapidly during these years, whereas due to the isolation of Japan, its swordcraft held onto to its medieval roots right into the modern era.

Selected sources: Swords & Hilt Weapons, Barnes & Noble Books, 1993; Ancient Armour & Weapons, John Hewitt; Arms & Armour of the Medieval Knight, David Edge & John Miles Paddock