Why do they deliberately (?) crush the quality for any video sent in by "normal people"?
Without an example it's hard to say, but I think perhaps sometimes people just hold up their camera and film, they can't or don't frame the shot or adjust the zoom, they're often standing in one place and can't get closer to line up a good shot. Also lighting is super important for good video, unless it's filmed during the daytime in sunlight, the quality really suffers. 

If the image is cropped and zoomed for television, it will amplify camera shake (and most of these videos are handheld) and reduce the quality a lot.

I also think most people don't have high end phones. Even really good phones suffer terribly in low light. I think it's quite easy to underestimate how poor video looks when you view it back on a phone too - if you export it and view it on an external screen, the lack of quality becomes much more noticable.