This also seems like a recursive problem. US/Hollywood have huge marketing power, thanks to this, they can ensure that the movie they produce should make a decent profit, they can then invest more money to make better production.
On the other end, local european production don't have that marketing power, most "local" movie will fly under the radar, whatever they quality might be. They sometime make it to the box office in their country but there is just not enough interest to adapt it for other country. Due to this, it's also normal that local production tend to have less production quality.
But if you look, a lot of actor, director, etc, involved in hollywood production come from other countries. So there is talent everywhere in the world, it's mostly a money problem.
If this protectionism result in more diversity in movies, it might be a good thing.
Also, let's be honest, it shouldn't be that hard for Netflix&co to comply. They will just buy the rights to a shitload of shitty TV-movies that nobody wants and be done with it. It's already what they do in France, you would be surprised by how much crap that you never heard about is produced.