The classical labels differed vastly in recording quality. Many people know about the superb early RCAs and Mercurys. But there is much that was not as well recorded, for example, almost all classical music on Columbia, RCA post-1964, multi-miked DG, etc.
There is some evidence that the actual Columbia recordings were not all that bad but that subsequent processing was not good enough.
The recent Original Jacket Mozart and Beethoven sets with Szell and the Cleveland Orchestra have better sound than older CDs or the original LPs. A recent remastering of Haydn symphonies 93-98 on CDs is also quite an improvement. The Fleisher / Szell Brahms Piano Concerto No. 1 remastered for the Masterworks set is a wonderful performance with sound that doesn't get in the way of enjoyment.
The Bruno Walter / Columbia Symphony performance of the Beethoven Pastoral Symphony has always sounded good from the stereo LP to the current CDs.
I agree about DGs; there were many, many great performances that were diminished by lousy recordings. Fortunately, an independent team produced good sound for the Orpheus Chamber Orchestra recordings on DG. The Mozart and Beethoven symphony recordings with John Eliot Gardiner fared pretty well on DG Archiv. Gardiner's Haydn Creation and Seasons recordings on DG Archiv have quite good sound. The Bilson/Gardiner Mozart piano concerto set has great performances and the DG Archiv sound doesn't impede enjoying them.
A lot of classical labels have produced CDs with quite satisfactory sound. A few were hobbled by their doctrine about recording. Nimbus was stuck on distant, indistinct recordings with way too much reverberation. Chandos produced some orchestral recordings with cold, hard, overly reverberant sound.
I don't find the early RCAs and Mercurys to be uniformly superior in sound to what has been produced since then. Some RCAs like the Reiner Scheherazade have spectacular sound that enhances a fine performance. In others, you can hear the limitations of the technology they had available (microphones, electronics and tape recorders.)
Bill