Before I get into the grubby details, here is a crisp set of definitions from the AMERICAN HERITAGE DICTIONARY:
SHODDY adjective [[appears to be regarded as Standard English and not slang]]
1. Made of or containing inferior material.
2. a) Of poor quality of craft. b) Rundown; shabby.
3. Dishonest or reprehensible: shoddy business practices.
4. Conspicuously and cheaply imitative.
SHODDY noun (plural shoddies) [[regarded as Standard English]]
1. a) Woolen yarn made from scraps or used clothing, with some new wool added. b) Cloth made from or containing such yarn.
2. Something of inferior quality; a cheap imitation.
I cannot tell a lie. The only definitions I was aware of were ‘shabby’ and ‘of poor quality.’
Here is a pithy explanation offered by THE FACTS ON FILE ENCYCLOPEDIA OF WORD AND PHRASE ORIGINS:
SHODDY: Civil War suppliers cheated the Union Army with a cheap uniform cloth called “shoddy,” which literally unraveled on the wearer’s back—and added a new adjective to the language.
And here are the pontifications of the redoubtable OXFORD ENGLISH DICTIONARY:
1) (1832]: Woollen yarn obtained by tearing to shreds refuse woollen rags, which, with the addition of some new wool, is made into a kind of cloth.
2)  A cloth composed of shoddy wool; more fully shoddy cloth.
3)  transferred and figurative: Worthless material made to look like what is of superior quality; what is worthless and pretentious in art, manufactures, ideas, etc.; the class of persons characterized by the endeavour to pass for something superior to what they really are, with respect to wealth, birth, culture, or refinement. Also (U.S.), a ‘shoddy’ person.
The adjective can often be inferred from the noun, but there are some shades of difference, so I’ll include them here:
1)  adjective: Of a person: That pretends to a superiority to which he has no just claim; said especially of those who claim, on the ground of wealth, a social station or a degree of influence to which they are not entitled by character or breeding. In the U.S. the word seems to have been first used with reference to those who made fortunes by army contracts at the time of the Civil War, it being alleged that the clothing supplied by the contractors consisted largely of shoddy.
2)  adjective: Of a thing: Having a delusive appearance of superior quality. Also, cheap, inferior; displaying signs of use, shabby, dilapidated.
3)  adjective: Of, pertaining to or dealing in shoddy goods.
4)  adjective: Of behaviour, etc.: ungenerous, dishonourable; contemptible. [[added in the OED's December 2004 update]]
It is interesting that CASSELL’S DICTIONARY OF SLANG only discusses one of the above adjective meanings and that is probably because it considers it to be the only slang meaning (the others being Standard English).
SHODDY adjective [mid-late 19th century] (U.S.) : Used of those who either claim a degree of importance to which they have no actual right or of nouveaux riches, whose importance is not backed up by breeding or manners; thus shoddydom, the world of social climbers; as a noun, shoddies, shoddyites, shoddy aristocracy, shoddy society, shoddy(o)cracy. [from Standard English, shoddy, a woolen yarn obtained by tearing to shreds refuse woolen rags, which with the addition of some new wool, is made into a kind of cloth; thus, worthless material that is made to appear as if it boasts a high quality. The slang use was underlined after the U.S. Civil War (1861-5), when fortunes were made by the sellers of shoddy, who then attempted to use their money to enter society.]
Here are a few quotes from the OED illustrating each of their above four adjectival definitions:
2)<1863 “There are shoddy lawyers, shoddy doctors, . . . shoddy husbands and shoddy wives, and, worse than all, there are shoddy newspapers whose especial business it is to puff up all the shoddy in the world and endeavor to make the people believe that it is the genuine article.”—Boston Sunday Herald, 15 February, [age 2/3>
<1865 “Those who have become rich by swindling the United States Government during the Civil War compose the ‘shoddy’ aristocracy.”—The Reader, 8 July, page 36>
3)<1891 “When they built the shoddy cottages away down the hill–mere traps to catch rent.”—Our Fields & Cities in the South Carolina Scivener, page 16>
<1952 “Because Stevenson was the man to beat, and Kefauver was their man, they had to fall back on the shoddy pretence that Stevenson was the tool of the big city machines.”—Manchester Guardian Weekly (Manchester, England), 31 July, page 7/2>
4)<1895 “Nor is the furniture unworthy of the room . . . There is no shoddy antique about this.”—Surrey by F. Barrett, viii. page 194>
<1864 “Some shoddy upholsterer has here evidently had carte blanche, and the result is . . . gaudy ugliness.”—G. A. Sala in Daily Telegraph 26 February>
__________________<1918 “Putting shoddy into the uniforms sure is shoddy treatment for the soldiers.”—Bridgeport Telegram (Connecticut), 15 January, page 12/1>
<1940 “Brown did not cross the river at all. Worse, he sent no word to Ethan that he had failed to do so. It was shoddy treatment.”—Ethan Allen by H.Holbrook, vi. page 109>
<1964 It ought to be preserved . . . as an example to those who scar the game by shoddy behaviour, for there was not a single ill-mannered act from first to last.”—The Times (London), 30 November,page 4/4>
<1988 The shoddy way in which Stafford had treated him at the end.”—Jean Stafford by D. Roberts, xix. Page 403>
Ken G – July 27, 2010