This all seems about right, though I would add that the collapse of the studio system in the 1970s and the emergence of the MBA-run Hollywood machine that exists now and wants to avoid alienating anyone isn't helping matters. When one looks at the movies that take on "big issues" one notes that they are almost invariably not being made in the United States but elsewhere (I haven't seen the Romanian film 4 Months, 3 Weeks, and 2 Days that deals with abortion yet, but I will). Film is now the domain of the bean counters, and it is therefore unsurprising to see films being made as unwilling to say anything really controversial (and I don't really think that "Get out of Iraq now!" is really that controversial at this point).
It's not like the state of film and television is that desolate, though. The Wire is a towering achievement, as was Zodiac, but neither were huge hits (sadly) and while the former really does what we're talking about here and really illustrates the problems of our present-day society, while the latter wasn't really attuned to the present time--it could easily have been released twenty years ago. And HBO is a bit of a special case, in any event--they actually do produce series, like The Sopranos, Deadwood, and The Wire that certainly qualify as art because they have cultivated an upscale, artsy-kind of image.
I guess I don't really have an overarching point here, just a couple of observations.
