What I'd like to hear from people in the industry is something like this:
Why? The studios said project B lost money for reasons 1, 2, and 3. Here are the numbers they gave me: xxx, xxx, xxx. Because of these numbers, the studios said, we won't fund your project A.
It has nothing to do with race, they explained, and everything to do with money. We'd greenlight your project in a second if we thought it could earn a profit. But Project B (as well as C, D, and E) proves that the audience for pictures like yours simply isn't there.
Well, I'm theorizing too. Someone was willing to fund The Missing, Windtalkers, Pirates of the Caribbean, Apocalypto, Kingdom of the Crystal Skulls, Bury My Heart at Wounded Knee, Comanche Moon, The Ruins, Aztec Rex, and so forth. Not coincidentally, these all had flawed or negative takes on Indians.
Of course, someone also was willing to fund more positive movies as long as they were set in the distant past. Hence The Last of the Mohicans, Dances with Wolves, Geronimo: An American Legend, Squanto: A Warrior's Tale, Pocahontas, The Emperor's New Groove, Spirit: Stallion of the Cimarron, Brother Bear, Hidalgo, and so forth.
So it's not true that Hollywood won't consider Native-theme movies. It simply won't consider Native-themed movies with a modern storyline. Hence no New Moon or Avatar until somebody forces the issue.
My conclusion: Hollywood's investors, studio execs, and distributors have a stereotypical view of Indians. These people think Indians lived primarily in the past, on the Plains, as primitive savages. If any Indians are left, these people think they're modern-day savages: bums, moochers, thieves, mobsters, or killers. I.e., people who would sell their mothers for a drink, a welfare check, or a pile of casino cash.
Needless to say, that view is racist.
If you don't think my view of Hollywood is correct, show me the hard data. For instance, low-budget comedies, romances, dramas, thrillers, or horror movies with no-name minority casts that failed to make money despite studio backing. Then I'll believe Hollywood is turning down pitches for similar Native movies for reasons other than racism.
For more on the subject, see Indians Hold Steady at 0.3% and Roscoe Pond or a Big-Name Actor?
Below: "Savage Indian killers? Sure, we'll spend a few hundred million dollars on that. No problem!"