It's because of peer pressure and studio executives who are, in Medved's words, "profoundly and seemingly incurably stupid."
Speaking on campus last fall during a conference on how literature and films can stimulate -- or not stimulate -- business ethics, Medved said that although more than 60 percent of movies made nowadays are rated R, the G- and PG-rated films continue to generate the most box office.
So why doesn't Hollywood just make cleaner films and, presumably, more money? One reason is that studio executives are foolish business people, Medved argues. The other is that all critical directorial acclaim these days goes to people movie makers like Quentin Tarantino (Pulp Fiction) and Martin Scorcese (Goodfellas).
"(Directors) all want to be Martin Scorcese, a guy who has made 38 movies and only one has made a profit -- his worst film, Cape Fear," Medved said. "No one wants to imitate Rob Minkoff. Who's he? He directed a film called The Lion King, which worldwide has done 10 times the business of Pulp Fiction."
Medved blames Hollywood screenwriters for demonizing business people on the silver screen for the last 20 years. He told the audience at Notre Dame that he think that's because producers are the only business people most writers have contact with. And Hollywood producers are as bad as any stereotypical evil industrialist, he said.
No wonder today's cold-hearted, silver screen businessmen are a far cry from It's Wonderful Life's saintly George Bailey.
"Try to imagine a film today," Medved said, "about a compassionate banker."