Software quality isn't the easiest thing to define. In some cases, it means "no bugs", and it certainly looks to me as though the places turning out really-low-defect-rate code for, e.g., aerospace applications are doing a fair amount of up front planning (plus other things -- reviews, dedicated QA groups, etc.)

In other contexts "nice to use" is a better measure of quality, and I definitely agree that some iteration can help there. Even so, I'd caution that iterative development and a planned overall architecture aren't necessarily incompatible. And when following an iterative approach you have to be pretty careful to optimise for something that most users like, rather than a just bolting on everyone's pet feature.