Why foreign movies are so much better than American ones

Actually, the average foreign film is just as crappy as the average American film, only without the optimism and the great Hollywood production values. The foreign movies American film critics laud are exotics in their own countries, by and large. If Americans could see the foreign movies that are most popular in their own countries it would be an eye-opener. 
Moreover, Hollywood blockbusters offer simple black and white morality and rudimentary screenwriting in part due to the fact that they cost so much to make they can't make a profit without major foreign sales, and moral nuances and interior lives don't fly in major foreign markets.
That is, the market for nuanced films is no larger abroad than it is here, and exists in some countries only because the government subsidizes the creation of such films.
BTW people in other countries don't like subtitles any more than the American Joe Lunchbox does. The norm is dubbing, even in sophisticated countries like Germany (where Schwarzenegger is dubbed by a German who speaks hoch Deutsch instead of Ahnold himself, due to his hick Austrian German accent).