Despite the impressive performance of generative Diffusion Models (DMs), their internal working is still not well understood, which is potentially problematic. This paper focuses on exploring the important notion of bias-variance tradeoff in diffusion models. Providing a systematic foundation for this exploration, it establishes that at one extreme the diffusion models may amplify the inherent bias in the training data and, on the other, they may compromise the presumed privacy of the training samples. Our exploration aligns with the memorization-generalization understanding of the generative models, but it also expands further along this spectrum beyond ``generalization'', revealing the risk of bias amplification in deeper models. Building on the insights, we also introduce a training-free method to improve output quality in text-to-image and image-to-image generation. By progressively encouraging temporary high variance in the generation process with partial bypassing of the mid-block's contribution in the denoising process of DMs, our method consistently improves generative image quality with zero training cost. Our claims are validated both theoretically and empirically.