The lack of quality kinda concerns me too... Feels like it hurts the more polished games by association.
Perhaps some sort of "Testing / Experimenting" category would be the best way to go, since that's what most of those crappy games are, just someone testing something. Sometimes just testing the Arcade itself, really.
And having that category ticked by default when someone uploads something may be a good idea too.
I posted a kinda crappy game myself, to be honest, and I think it should not be competing in space with the more robust projects. I would use that "testing" category if there was one.