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I don't think they ruined Hollywood.
Sure, the Blockbuster of the late '70s onward didn't have the gritty realism or social commentary of the late '60s and '70s. But times were different. In the late '60s the world had Vietnam to fear and outrage. Hollywood reflected this with a raw, visceral cinema. Relative harmony and prosperity in the late '70s and '80s led to a more "larger than life" experience in the cinema.
It's like the 1930s vs the late '40s and '50s. In the early to mid '30s some of the biggest 'stars' of Hollywood were the Universal monsters. These early Universal monster films were dark and intense (for the audience of the time at least). Fast forward to the mid '40s and the Monsters are all meeting Abbott and Costello, and we are well into the domain of the Hollywood Musical. World War II (and the turbulent inter-war period of the late '20s and '30s with its fragility and Great Depression) gave us a more serious, more downbeat cinema, yet the prosperity of the post-war era led to a 'lightening' of Hollywood.
So, these Blockbusters really reflected a changing social consciousness.
This is no different to the situation we have today. The world is becoming expensive and cautious (GFC, etc). Hollywood is cashing in on what it sees as a 'sure thing' - modern remakes of stars of the past. It is not a time for risk taking. The '80s were the time for that.
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