Avatar was good..the special effects were great..but the storyline and script were bad..Not that great. Just a remake of old stories.
The story is original, it's the plot that is derivative and script that is formulaic (Star Wars Ep 4 would be a good comparison). It was expected though, considering Avatar was made to test the waters for his newly developed 3D system to make sure Battle Angel Alita fully benefits from it or if the mainstream is ready.
People forget sometimes that the Oscars are a business and like any other business, they need to make money. No one is going to watch if all they do is give awards to small independent movies (which a lot of times I feel are more worthy) and so they do things to increase viewership ie bumping Best Picture nominations to 10, including popular movies which aren't worthy, and awarding fan favorites.
It's fun to watch, bet on and talk about, but no way is it a TRUE means of awarding for art. It's the closest thing that is available and I'd say that they do a good job at awarding to those who are deserving, most of the time.