I think the fact that so many people want a good theater experience and the fact that they’re largely crap is a (current) market opportunity.
AMC has been rolling out upgraded experiences across their chain (food to seat service, reclining seats, etc), but I don’t know to what extent.
Alamo is literally the only place I'll watch a movie due to their "No, really: no using your cellphone" policy, so I'm happy to give them my business, but I draw the line at mediocre food. It's too bad and kind of ironic because they messed up their menu in a drive to greater profitablity and lost a lot of their most profitable business as a result: the margins on food and alcohol are far better than ticket sales.
The cost of keeping a variety of food offerings, and the equipment to prepare them, and the people to run all that, may simply be too high for the current levels of attendance.
I guess tastes just change. Dinner and a movie did not use to mean dinner AT the movie.
If you want a full restaurant at the movies why not also have an oil change as part of the deal? Watch the movie, all you can eat soup, salad, breadsticks with your meal and at the same time someone changes the oil in your car.