You said, "I get a little tired of Hollywood continually patting themselves on the back. I bet even the actors themselves must hate the sight of a red carpet."
I've often said this. I'd rather see awards for firemen, policemen, teachers, etc. Actors do nothing but play pretend and every time you turn on the TV there they are marching down the carpet acting like they've saved the world. Why do we constantly have to go through all this hype over nothing?
Therein lies the real question. Why does anyone care? Why are so many people all in a tizzy over an industry awards ceremony that really means nothing more than an episode of "Survivor"? ("We're voting "Cinderella Man" off the island.") By being outraged at Hollywood's celebration of movies you don't like, you're still buying into the notion that the Oscars are in some way, shape or form important. They're not. What they are is a TV show.
The fact is that people like watching celebrities. Award shows aren't expensive to produce and they garner pretty good ratings. Even with viewers down this year, the Oscar broadcast will easily win the timeslot. Advertisers will buy expensive time. The network will make money, even if it's not as much as they dreamed of. Some of the movies will get a modest bump from the PR. The sun will rise in the east.