The average person consumes lossy-compressed movies and music through their phone or laptop. They wouldn’t know high quality sound if it trumpeted down from god.

We have traditional cable TV, where there are standard def channels on, say, channels 2-99 and then identical HD channels from 702-799, and my wife constantly lands in the SD channels by accident and doesn’t notice the difference. I have switched back and forth between the same show on SD and then HD to show her the huge difference and she just shrugs and legitimately doesn’t see it or care.

I've processed lots of sources with 5.1 audio that have "interesting" issues of various types. My favorite is when the LFE channel has a full range signal instead of a low pass filtered one. When that data is down mixed by what ever chip is doing it, there's way more data in the mix resulting in not what one would hope. These are studio provided sources that have been outsourced to 3rd parties for various reasons, but the LFE is often the red headed step child of audio data.

God, does 5.1 or better really shine on 90s surround sound movies. And occasionally newer ones, but a lot more back then.

They also hadn’t given up on original music. It’s crazy how much the soundtrack elevates otherwise-not-amazing films like Twister. I desperately wish they’d at least go back to caring about that.

A lot of it is that the design of good home theater equipment is ugly and not spouse-approved. My wife simply will not tolerate big black speaker boxes and a black stack of receiver equipment in the family room. No matter how well it’s hidden away. And I know a lot of families that have the same desire for a nice looking living space.