Here's my take on it. Cats will do okay on the cheaper foods, just like many people survive on fast food and Top Ramen noodles. A co-worker of mine feeds his cat real cheapo crap (we're talking store-brand here) and his cat is 15 years old. But, just like people who live on fast food, they suffer from lower energy, excess fat, and bigger, smellier poops. The reason is, cheaper foods use a lot of grains as filler, so each piece of kibble has less meat and protein in it than a better brand. The cat then must eat more of the cheap food to get the same amount of necessary nutrients. Add to that the plentiful carbs in the food (that the cat doesn't need) and you get weight gain. And, because a lot of the cheap food is junk, it results in more waste.
So, I think the quality of the cat's life is lessened with the cheaper foods. I know money's an issue, but that's the beauty of the premium brands. They contain more meat and more digestible ingredients, so the cat actually eats less of it to get the same nutrition. I've found that you actually spend less because the premium food lasts longer. Add to that smaller, less smelly poops, and it starts to look like a clear choice. In the California Bay Area, I've seen some of the better brands (Solid Gold, Innova, Natural Balance) for $12. I think you can even go with something like Maximum Nutrition, which is the Walmart house brand. The ingredients are very good, and it's only $7 for an 8 pound bag.