You are correct. But how can it be allowed to reach a situation where some leagues get 4 places in the group stages, and other nations get a single place which they still have to go through qualifying for? Why are the likes of Arsenal/Spurs/Sevilla/Monchengladbach granted favourable entry over the likes of Slavia Prague or Red Star Belgrade? The answer appears simply to be that they come from a big-money league.
That is just increasing the gap between the leagues.
Again, the co-efficient is just UEFA's way of getting more teams from the money-spinning leagues (England, Spain, Germany, Italy) into the final stages.