So it seems like at least half the Flyertalker community "books away" from USA carriers on int'l flights because they don't like the in-flight service.

If that's the case, wouldn't it make some sense for these carriers to try to IMPROVE that service? Not sure what you can do about inferior cabin crews -- seems like a tricky proposition to improve morale (or at least the appearance of morale). Maybe you could encourage pax to give feedback on their experience with their flight attendants, and raffle off cars and other prizes to high scoring attendants (kind of what Gordon Bethune did to improve attendance when he was CEO of CO).

Installing new entertainment systems/buying new planes is also difficult. But what about spending 5 bucks more per pax on in-flight ammenities, like better food/drink? I would think those 5 bucks might make a signficant difference in quality perception.