It might be successfully argued that Godfathers I and II were the last truly great films to come out of a major Hollywood studio.  Yes, there have been some wonderful independent films backed by Hollywood -- some of the Coen brothers works come to mind -- but the vast majority of it has been formulaic, overly dependent on special effects, devoid of intelligent scripts or insightful acting, and, while delightully escapist, at heart an insult to the viewer's intelligence.

Hollywood did make great films in the 40s and 50s.  But the lure of easy money through lacklustre artistic expression has become irresistible.  It's easier to choreograph a series of explosions than it is to write an evocative and suspenseful scene, and it is also easier to rely on two dimensional stereotypes than it is to create a multi-dimensional character.