TBH it's a bit strange to pay the premium for an OLED but then not be willing to pay for the highest bitrate. The fact that it's called 4K and it's technically in 4K is a bit misleading. Plus having Dolby Vision will make a huge difference when watching on an OLED.
Keep in mind, it's not like it's Netflix alerted me to a problem. I've used the LG built-in app, so they know what TV I have. I just had shows with crappy scenes for a long time.
I'm not an expert on panel technology, but I think because LCDs have a backlight, the issue isn't as pronounced there. It just kinda washes out.
My best guess is their choice of codec and compression settings predate OLED availability and they don't want to re-encode and just expect people to upgrade to their 4K plan. I've never had their 4K plan, so I can't say whether that truly addresses the problem.