I think another part of the issue is that many people are photographically illiterate, so to speak. Though everyone will generally recognize a truly great photo when they see it, many people also call low-quality photos "great" because the person looks good in the shot. It's just easier to go out and take hundreds of photos of your friends with your P&S digital. (Getting back to Jeff's point about people simply not being motivated enough to seek out a pro photographer...)
As an example, I had recently agreed to do promo portraits for an emerging, local musician. However, as soon as I asked him to tell me more about what he needed (# of shots, web vs. print, etc.), I never heard from him again. A couple weeks later, new photos that were obviously taken at arm's length or by a random friend with a camera, showed up on his myspace profile. He looked fine in all of the shots, but as photos, they were horrible. (One that stands out in my mind was where the only thing in focus was a vein popping out of his arm reaching toward the camera.) And yet, he had hundreds of comments about what "great" photos they were.

Many of the comments were probably from girls who wanted his attention, but I'm wondering if most people have become satisfied with seeing your average snapshot for anything besides major life events these days.