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It would be difficult to generalize about a loss of lens sharpness or contrast when using the Canon Drop In Polarizer, because one of the things that any polarizer can do is enhance contrast. Cutting haze to significantly improve contrast is one of a polarizer's benefits, but reducing specular reflections on green foliage or rock is another, and the result often gives not only improved contrast of those items, but also the appearance of improved sharpness. So any comparison with and without a polarizer will be highly dependent on the subject and lighting and the adjustment of the polarizer.
There have been past discussions about replacing the glass of the drop in polarizer with a better quality one. Most of what I remember has been trying to get an improvement in the amount of light lost, and not specifically to improve image quality. Singh-Ray has in the past offered a modification of the Canon Drop In Polarizer to upgrade to one of their polarizer glass elements, but I am not sure if they still do that. I have never upgraded my polarizer, and am very happy with the Canon version.