I take exception to your assertion that Olympic logos are typically bad. The Munich ’72 logo might evoke nothing more than a ‘meh’ if it’s all alone but its applications were absolutely stunning [1]. The takeaway might be that it’s best to design a solid logo that offends no one and put all the elaboration and quirkiness [2] into the rest of the identity.
[1] Poster: http://www.flickr.com/photos/insect54/2307407256/ – Tickets: http://www.flickr.com/photos/realnotreal/3509806052/
[2] ‘Waldi’ is the weird but funny mascot of the 1972 Olympics: http://www.flickr.com/photos/marcosdopico/575561156/
http://logoblink.com/2007/12/12/london-2012-logo/ is the story from which that linked image comes, they've blocked the image it seems (from their own page too).
What's really interesting is that the logo for the bid is almost always much better than the logo for the actual games; for instance all the logos of the bidding cities for 2012:
http://logoblink.com/wp-content/uploads/2007/12/olympic-logo...
are actually pretty good.
Another example: Sydney 2000. If you look up the logo of the bid, it's pretty attractive, just the outline of the Sydney Opera House in the Olympic colours. But by the time they created a logo for the actual games, they took that logo, reversed it, and added some boomerangs (gotta get an Aboriginal influence in there!) plus a picture of a running man (sorry, person) in order to get something entirely too complicated and just plain ugly.