First of all Netflix productions are not great in general, there are a few very good ones, the rest is just mediocre.
Secondly, Netflix is not the only streaming service offering the same content.
Last, but not least, in Europe we have been watching European shows since forever on national and private television networks.
Two of the most popular shows ever in Italy are Fantomas, which is French, and Derrick, a German crime series started in 1974 that lasted ~~14~~ (TYPO! it was 24!) seasons. We've always translated and dubbed foreign content, Netflix hasn't really changed anything in that regard. We also watch a lot of national productions, like for example in Italy Gomorra is very popular and highly rated (there are many others)
European movies in theaters have also been quite popular over the years, it used to be more popular until the 80s, but French cinema for example is still producing great movies (I think everybody knows who Luc Besson is).
The Italian actor Carlo Pedersoli (Bud Spencer) was so popular in Germany that when he died German Post offices released a series of ten stamps as a sign of gratitude and respect.
Besides, some popular American productions are remakes of European content:
Forbydelsen (Danish) -> The killing
~~Humans (Sweden) -> Real humans~~ (not American)
The Returned (France) -> The Returned