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.
Anecdotally, having interviewed for Disney Streaming, they seemed extremely interested in the tech side.
IMO assuming Netflix doubles down on original content which seems to be the assumed direction, they have two strategies. Strategy one is to produce/distribute content that is developed outside the US where production is much cheaper and existing production companies have less of an advantage. Partnering with local, smaller production outfits is probably a good strategy.
Strategy two is to use their tech advantage to lower the cost of content production. I'm quite surprised that we haven't seen Netflix create a Holodeck-esque production method. The Mandalorian (Disney+/Holodeck) and The Witcher Season 1(Netflix) have somewhat similar production costs per episode at ~$15M and ~$10M respectively but The Mandalorian had significantly more and better CG then The Witcher so clearly the Holodeck method has a lot of benefits and cost savings.
That said Squid Game only had a total budget of ~$21M, although a lot lighter on CG, strategy one offers a more cost savings.