In a nutshell, the audience for nuanced, elaborately plotted scripts is not as big as that for epic hammy ones. The movie industry (qua theaters) is not really about movies so much as it is a marketing operation for comfy chairs, sugary drinks, and popcorn. Hence the big-budget movie emphasis on the 'wow' factor, best appreciated via a 75-foot screen.
To some extent, it's always been this way. Look at Shakespeare: most of his plays are set in foreign countries which would have been terribly exotic to his audience, or are concerned with battles, magic, or murder - it's all pretty sensationalist stuff.
With this sort of big-budget production story complexity takes a back seat to putting the audience 'into' the experience. Gattaca is a fine sci-fi movie that turns on a clever script and strong acting performances, but it wasn't exactly a box-office sensation. But it was pretty cheap to make. with something like Avatar you want a story that everyone can follow easily rather than one that risks alienating any segment of the audience. Epic stories generally try to minimize ambiguity and complexity: the payoff is emotional rather than intellectual.
It doesn't have to be complicated, but at least it should be realistic. For example it bothered me that the flora and fauna on Pandora was completely unrealistic. I don't think horses would have a very good time in the jungle, for example. If it was realistic (ie adhere to evolution theory), then one could still learn something from the movie, even if the plot was shallow.
Likewise in terms of evolution theory, I wonder how/why would loads of animals evolve with a common digital port. Not saying it is impossible, but then the history of that would be seriously interesting (I suppose the whole world would have to be an artificial creation by an ancient high tech race or something).
Instead, this movie dumbs down the common public by reinforcing naive stereotypes.
What amuses me in that context is that for example, the real native Americans did not even have horses before the settlers arrived. This just shows to me how extremely shallow the research for Avatar was. Of course natives have to ride horses and scream passionately and engage in stupid fights and rituals.
It bothers me because as it happens, I consider artificial life to be one of the most exciting things. There would have been so many opportunities here.
It's also true that if you're spending $300,000,000 making the movie, it's got to play everywhere. EVERYwhere. It's going to be translated into 50 languages, usually badly. It's going to play in villages where no one reads and no one speaks English and the sound system loses half the words anyway.
Simple works. Complex doesn't.
As foreign box office has grown to a higher and higher percentage, this has become more and more true. Avatar did over 2/3rd of it's global box office opening weekend outside of the US and Canada (the "domestic" market).
A simple script isn't the same thing as a bad script, though. Star Wars, Raiders of the Lost Ark, Die Hard, Alien... these are simple scripts, but they were all turned into good movies.
The problem with Avatar's script is not so much its simplicity, but its preachiness. A story set in a simplified world of good and evil isn't so annoying (cf Star Wars) unless it's supposed to be making some kind of political commentary on our own world.
So many expensive movies reportedly have terrible dialogue and scripts that there must be a reason other than the obvious. Maybe it's really, really hard to tell if a script is good before it's filmed? I dunno.
It's pretty simple really, most people can't follow a complex plot. For a big blockbuster movie to make money it has to attract the widest audience possible, and that requires dumbing it down so the average person can follow along and not get confused.
This technology however, once it becomes more widespread and cheaper, will enable future movies to be made so cheaply that it'll become profitable to chase the more targeted audience. You can't make a smart movie for 300 million dollars, you'll lose your ass; there just aren't that many smart people out there that would appreciate it.
But when you can eliminate the actors, and their salaries, and just CG everything and hire a bunch of voice actors, and get that 300 million movie down to 1-10 million, then you can target highly selective audiences with something aimed directly at them profitably.
Take for example Man From Earth http://en.wikipedia.org/wiki/The_Man_from_Earth shot for 200k, exactly the opposite of Avatar, virtually no budget and a fantastic plot. A movie I loved but couldn't get most people to sit through if I tried, they just wouldn't appreciate the plot and would complain about how cheap it looked.
I loved Avatar by the way, but not for the plot, it was exactly as weak as I expect all blockbuster plots to be, but it was fucking beautiful visually and technically stunning.