A bit rate of an audio file at 128 kbs is approxinately 1/10 the bitrate of a cd. I'm not sure what you were expecting. Unfortunately, "the industry" kept insisting this was a prime bitrate at the time NWN came out.
We know that was a lie because most audio these days is 320 kbs (and "the industry" is still sticking to constant over variable bitrate for streaming and digital because consumers think they are getting better at a constant 320 even if much of that bitrate is completely wasted on segments where it wasn't needed). It's an improvement, though still considerably less than a cd.
The only time you're going to get CD quality is in a lossless format and the only time you're going to get degredation outside of what Tchos covered is if you reencode at the same bitrate more than once with a lossy format. Each time you encode, more information gets tossed out leading to a poorer quality resulting file.
