Actually, some things from Wal-Mart are fine, as long as you know what to lok for and understand the technology. You cannot expect to find the highest quality equipment there, but if you understand the limitations of what you buy, much of it is perfectly fine within its design. There are many thousands of people who are likely perfectly happy with the same product that you found inadequate.
In general, it has been the case that amplifiers will start clipping with typical music at about half of the range of the volume control. The bottom line is, when you hear distortion, turn it down immediately. That is the case with nearly ANY system.