If a local director could make a movie with comparable quality to Hollywood movies - I would watch his movie. Hollywood only dominates, because their movies have way higher production quality.
There is only so much you can do with shoestring budgets that our directors have.
In the same sense that the revolution that occurred in the digital distribution of games and general improvements in the accessibility of tooling meant the market for games expanded into more niches rather than producing more AAA games from smaller developers.