Dallas Jenkins, a filmmaker and son of Jerry Jenkins (of "Left Behind" fame), offers his take on this in a post entitled "Why Are Christian Movies So Bad?" He says this:
"What took Hollywood so long to discover the Christian market? Why can’t they replicate even half the success of “The Passion?” And when Christians make up over half the population, why are faith-based films still relegated to the low-budget, straight to DVD world? The seemingly obvious answer would be that there are few Christians in Hollywood, both at the studio and creative level, but even that would raise the question of why.Jenkins goes on to point out how the relative absence of influential Christians in Hollywood, the emergence of alternative Christian media and the emphasis placed on message over art in many Christian films all play a role in the lack of quality, popular movies made by Christians. Since Hollywood is one of the greatest influences on our society, it only makes sense that the products that Christians put out there are as good, if not better, than what others offer.
I think I know the reason(s), although it’s a bit embarrassing because I happen to be a Christian evangelical. But we must face the truth, and as Dr. Phil so eloquently and charmingly puts it, “You can’t change what you don’t acknowledge.” The fact is, Christian movies have been pretty bad for a few decades. Yes, Hollywood had largely ignored the Christian market, but it’s not like there have been good examples for Hollywood to learn from. And now that Hollywood is actively seeking faith-based material, there’s still a lack of quality scripts and filmmakers available, with a few exceptions, and among the films that are being made in this genre, there are still more crappy ones than good ones."
You can read Jenkins' full article here. (Thanks to The Point for the tip on the article.)