OP, what kind of conditions were you looking at your 400 yard target at.
Was there a lot of mirage???
I have a top of the line spotting scope and it will pick out 22 calibre holes long after the 400 yard mark. When the conditions are not good though, mirage etc, even with this optic, Swarovski, things can be difficult.
I will say right now that out to 600 yards, I haven't been stopped from reading a target yet but small holes under difficult conditions can be hard to see.
For most shooting purposes, even an old Bushnell Spacemaster will do the job. Targets are easily focused on because they don't move. Once you reach a certain point in lens quality, nothing much changes, other than the rare earth coatings that allow for better light absorption and therefore sharper definition under low light conditions.
If you can possibly do it, check out several different types of scopes as well as more than one of the same brand at the time of purchase. Like rifles, not all scopes, even of the same make and model are created equal.
When I bought my Swarovski, from a CGNer, I had just bought out an estate where the fellow was an Ornithologist. Those bird watchers insist on ultra sharp definition.
Every one of those spotting scopes were top of the line. The fellow knew his stuff. His lowest quality spotter was a Burris with an 80mm objective lens. There was very little difference between it and the Zeiss, Leica, Pentax, etc. The differences were really apparent with all of them under low light conditions.
Birds, especially the rarer ones, quite often don't come out during mid day light, so low light definition is highly sought after.
In all honesty, the Swarovski beat all of them. It was also more expensive than all of them, other than the Zeiss, which was about equal in price.
You just can't can't judge the book by the cover and even good authors get it wrong at times.
The thing is, with high end glass, they very seldom get it wrong and even when they do, it's almost undetectable by any but the most astute and fussy user.
I really love being able to scope out a deer/elk/moose at 1500+ yards and be able to check its rack out in the last 15 minutes of shooting light. Sometimes, it means that I will return in the very early morning to try to bag the animal.
That type of perfomance from glass, is a lot more important than seeing bullet holes at those ranges.
Your scope is probably fine for range work and you are most likely screwing up the magnification out of its useful range. Many scopes will not focus clearly at their highest settings, without a lot of fiddling around, even under good light conditions.
