As a Christian, I believe in the natural depravity of man. Human nature is sinful. Media such as Hollywood is one case where I'm not sure I trust the free market. Sinful humans crave sex, violence, etc. and marketing executives give them what they want. Depravity sells, thus we get the lowest common denominator.
Although maybe it isn't selling. This was the lowest grossing set of Best Picture nominees in 20 years, and when you adjust for inflation one of the lowest grossing sets ever. The ones still out didn't even get the usual post nomination bounce.
Ironically, it doesn't. The big winners this year were "The Passion" and "The Incredibles." Wholesome, family movies are usually the box-office winners. So why aren't there more of them? Because Hollywood has an agenda beyond making money.