The only thing I can gather is the NET overemphasizes playing Quad 1 or 2 games, not necessarily winning them.
Not really. It's an efficiency metric. If you are more efficient than you were "supposed to be" then your rating will go up. If you are less efficient than you were "supposed to be" then you rating go down. That is true whether you are playing the number one team or the number 350 team.
That's why you can lose to the number one team and go up, and you can beat the number 350 team and go down.