I think your comment is pretty spot on. Just three things I'd add to, are that 1) the advisor is not intentionally downgrading your letter to "just good", but it's that they're obligated to write a better than "just good" letter for someone who has been more productive both in terms of research and in being a leader in the community (these two things go hand in hand). Writing the same letter for two students regardless of what they accomplish would be unfair.
And 2) sometimes getting more funding is simply not possible, as in the advisor has basically reached the limit of what they can do. There's a limit to the number of proposals that one can submit and the number of calls that fit their research agenda. So what I think you're missing is that if an advisor has less funding, there's going to be more pressure to finish sooner and less freedom to explore ideas beyond what's written in a previous grant proposal.
3) I've never heard of a tenured professor that concerned about their publication rate. In fact, most of them don't even update their CVs or websites with the last few years of papers. It's always the student who is trying to get more papers.
And 2) sometimes getting more funding is simply not possible, as in the advisor has basically reached the limit of what they can do. There's a limit to the number of proposals that one can submit and the number of calls that fit their research agenda. So what I think you're missing is that if an advisor has less funding, there's going to be more pressure to finish sooner and less freedom to explore ideas beyond what's written in a previous grant proposal.
3) I've never heard of a tenured professor that concerned about their publication rate. In fact, most of them don't even update their CVs or websites with the last few years of papers. It's always the student who is trying to get more papers.