I don't have any documentation to back this up, but from what I remember Miller bought Leinie's when Leinie's was starting to expand throughout Wisconsin. They kept making their specialty brews in Chippewa Falls and moved production of Leinie's Original to an idle brewery in Milwaukee (info on that brewery should be easily available). I heard rumors about water being trucked from Chippewa Falls to Mke back in the day, but I can't guarantee that. With the cost of diesel, it would be cheaper to duplicate the mineral profile of the CF water from RO water made in Milwaukee. The brewery tour shows you the "original Big Eddy spring", but they switched to city water in the early 90's I think (I toured the place around '00).
I think Leinie's mainly takes advantage of Miller's (much larger) distribution network but retains control of the breweries. Their output must have gone up a lot because it's a *lot* easier to find their brews when out on the town. I haven't really noticed a decline in the quality of their beer; I still get after some once in a while because it's often the best beer available at the dives we hang out at. Leinie's Red holds a special place in my beer-loving heart because that was the first beer I switched to when I decided to go down the path of the EAC and turn away from Bud and Miller.
That said, Leinie's isn't anywhere near the best beer available, nor the best beer made in Wisconsin. Don't get me wrong--the Creamy Darks go down real, *real* easy but I'll take a New Glarus Fat Squirrel first every time.