It turns out that most of the time that students taking college classes in high school come in to regular college and fail, it’s because they were allowed to take classes they didn’t meet grade or score requirements for. Letting a D student take classes that are supposed to be restricted to B students and up doesn’t answer the question of whether the class itself is “watered down” at all. It merely shows that a lot of people are willing to commit fraud either for cash reasons (more enrollments and thus more funding) or ideological reasons, thinking they’re “reducing inequality” by ignoring the logical rules.
Additionally, dual enrollment has matured enough that it’s much more typical for states to just teach the exact same course on both high school and college campuses, or online. The evidence is poor that dual enrollment courses are particularly watered down compared to any other college coursework. The evidence is far stronger that dual enrollment is used fraudulently to push low-performing students into college coursework they can’t complete in order to boost statistics about different groups having college prep or early college exposure.