You seem to be under the impression that having "higher quality steel" would somehow make a sword "better", that's not how it works. Japanese smiths usually had access to what's called Tamahagane steel, it historically had a low carbon content which made it softer than desirable, so they'd fold the steel to rid it of impurities and obtain a higher carbon content for the core of the blade, leaving the edge side softer to be sharpened. Having access to steel with a higher carbon content would only accomplish in the smithing process being more straight forward, with the end result being essentially the same.

The reality is that Katanas (and other Japanese blades) were already as good as they'd get and you can't really compare Japanese swords to European swords objectively because they were made with different purposes, in different contexts with different results in mind. For instance, a Katana is a single-edged sword with a slight curvature and a somewhat rounded tip, it was made for slashing and it did that really well, but a typical Arming Sword is a double-edged, straight blade with a very pointy end, it doesn't really slash as well, but can cut in both sides and the point can be used to pierce armor gaps in an adversary.

So you see, "steel quality" has a minimal baring when it comes to the actual usefulness of a weapon, what really matters is how it's used in combat given it's characteristics.