I'm not trying to dig on Lucas much anymore, but in that setting, given the environment the characters live in, having more wooden performances is preferable, and then you have a very capable actor like Duvall or Pleasance in it, they're going to stand out above the material itself. I like THX-1138, but it's kind of all over the place, too, with its ideas. So, pointing the camera and not eliciting much from the actors (unless the actors themselves are much mroe in-tune with their performances), THX-1138 worked in that respect.
And I totally agree about American Graffiti. You had that wonderful touched up script by Katz and Hyuck! Plus some improvising by some natural actors.... you're points are right on that mark, Zombie84.