Low quality papers on Arxiv
Submissions do go through a moderation process to ensure that the paper has "refereeable content"; at minimum this means that the paper must present "original or substantive research" but it does not require that the research methodology is actually sound or that the findings are actually correct.  Establishing soundness (and to a certain degree, also correctness) is the point of the full peer review process, which is something arXiv lacks by design.

In summary, the reason there are so many bad papers on arXiv is that arXiv intentionally makes it easy to post unreviewed material.  If you are doing a literature review and finding high-quality papers is important for you, you would be better off browsing or searching an expertly curated list of papers, such as those contained in a journal or a volume of conference proceedings.  Of course, even some bad papers can make it into such publications, though the proportion will be astronomically lower than in an (almost) free-for-all self-archiving service like arXiv.