Are you factoring injured players in your analysis? Yes, pitching has been a bit down, but the Brewers have also dealt with several key injuries to the pitching staff. The Brewers are on the cusp of getting Woodruff, Miley and Ashby back - which should significantly benefit the rotation and pen. Rowdy Tellez and Brian Anderson should also be back in the lineup soon, too - which will help improve the lineup depth and allow Counsell to play hot hands better.
I'm not as in tune with the Reds and Cubs lineups as I am the Brewers, but it seems to me both clubs have been closer to full strength than the Brewers have been over the past couple months and the Brewers were still leading the division until they got swept on the road by the best team in baseball. I don't necessarily thoroughly refute your prediction that the Brewers will finish 3rd in the division because the bats kinda suck and you need to score runs to win games; but pitching can carry teams to wins, too, and barring injuries & recovery setbacks the Brewers will be poised to have one of the best pitching staffs in baseball again when they get healthy.