Many electrons, and some ink, have been spilled over the past few weeks to explain why Americans don't watch/like soccer--too few goals, hands v. feet, diving, etc. To me, quite frankly, most of the hyptheses seem like ex post rationalizations rather than explanations, both on their own internal validity as well as the presence of counterexamples. Baseball and football certainly are bizarre in their own ways, baseball is low-scoring and has a long tradition of cheating and gamesmanship (even pre-steroids). Football may be one of the most peculiar and unique sports in the world, with the constant play interruptions for huddles and the like. So, as I said, I think most explanations are actually just rationalizations that aren't generalizable.
I'm certain this is not terribly original, but my hypothesis is quite simple--Americans don't like soccer because Americans don't like soccer. The sports embraced by a given society/country/culture are largely conventional and traditional. For the same reason that Germans don't like baseball (and the Japanese do), and the Brazilians don't like football. Sports, as a spectator event, are essentially social network goods and preferences for one sport over another are almost purely conventional. The joy of sports is watching it together as a community and discussing and arguing about it together. As such, almost any sport will do to serve that function. People routinely gather together to watch sporting events, both live and in person. We generally don't gather together to watch other things on television, except the rare tv series finale or election night news coverage (another community event, of course).
I don't think that the rising and falling fortunes of various sports has much to do with the intrinsic value of one sport over another, except at the extremes. All sports are inherently a completely arbitrary test of skill. You just create a set of arbitrary tasks and then the athletes perform them to the best of their ability. Why is NASCAR so much more popular than Indy racing? Why is Indy racing more popular in some subsections of the country? I can't see how the intrinsic differences between the two sports makes a difference. Why Australian Rules Football, curling (as in the Winter Olympics), or Irish hurling?
As an aside, this is precisely the point that the Supreme Court failed to grasp in the Casey Martin case a few years ago--why do you have walk when you play professional golf? Because it is part of the sport. Why? Just because it is. Why a 10 foot hoop in basketball rather than 11 or 12 feet? Why 60 fee 6 inches to the pitcher's mound? Why 18 holes in golf? Why 500 miles for the Indy 500? Just because, that's the arbitrarily chosen task that comprises the sport and to ask "why" misses the entire point.
The way to think of sports, I think, is like fashion (I'm sure this isn't original to me). The rising and falling interest in sports over time is just a matter of changing tastes, rather than one sport or another being better or worse than another. Having just read Jeremy Schapp's "Cinderella Man" I was stunned to learn how popular boxing was in the 1930s compared to all other sports. Babe Ruth's scandalously large contracts during that era were a small fraction of the amount that Jack Dempsey would pull down for one fight. Today, boxing is a borderline fringe sport. Ditto for horse racing. The Olympics may or may not be in a permanent death spiral--I suspect that it is too early to tell. Hockey has gone from one of the country's "four major sports" to essentially the same level as Major League Soccer, and I think the NHL strike just expedited a trend that was already underway. It is now standard to refer to the "three major sports" in the U.S. Casual sports fans used to be expected and able to watch and politely talk about the Stanley Cup playoffs; today that is no longer the case.
So, the World Cup is becoming more popular because, well, it is becoming more popular. For whatever reason, one can speculate. But I'm guessing it has little to do with the intrinsic merits of soccer and more to do with the fact that it is becoming part of the lexicon of the casual sports fan, perhaps because it is fun to be wrapped up in an event of such global proportions. But, for instance, I don't expect much crossover from the World Cup's popularity to MLS. In the sense I am thinking of it, MLS is essentially a different sport from the World Cup because it is wrapped in a different social network, not because it is somehow a different sport.
I had an interesting conversation with someone the other day who had been watching the World Cup with some degree of enthusiasm and interest. I asked him to name three guys on the DC United roster other than Freddy Adu. He named zero. He has watched the World Cup but has no plans to ever attend a DC United game or to watch DC United on tv (even though DC United is 9-1-5 this year and playing some great soccer). So while I'd like to believe that others will come to share my enthusiasm I am not optimistic--except in the Spanish-speaking community, from whom I consistently receive thumbs-up whenever I wear my DC United jersey.
One final thought--at root, sports must still be a game of skill, no matter how arbitrarily chosen the task. David P. suggests that chance in the form of referee's calls is part of the appeal of the game. I don't think so. I think most fans deplore the impact of officiating in this World Cup and its impact on games. I was living in Italy in 2002 during the World Cup and my sense was that they didn't appreciate the role of questionable refereeing in determining outcomes, even before losing a game riddled with questionable calls. I think that soccer fans tolerate it because they always have and there does not seem to be sentiment at the highest reaches of the sport to try to change it.
In the end, it should be skill, not chance that decides games, and this seems to be a universal sentiment. One problem with the World Cup is that the talent levels are so compressed these days that almost every game comes down to a single goal and thus one referee's call (a penalty kick or quetionable red card) can thus prove decisive in a game.
If one wanted to think about how to reform the system there seems to be two possible approaches. One approach would be to try to increase accuracy, such as by adding a second referee on the field--it is not plausible that one referee can competently cover the entire field today when the players are so fast and strong. US basketball moved from two to three referees a decade or so ago and--somewhat counterintuitively--empriical evidence finds that the number of fouls called in games actually fell. The reason is because that more referees dramatically increased the probability of detection, so players became less likely to try to get away with something.
A second approach would be to try reduce the impact of referee's decisions on games, and especially red cards, such as by allowing suspensions within the game calibrated more closely to the severity of the offense (e.g., something like a "penalty box" with 5 or 10 minute suspensions, rather than red cards). It is also worth at least considering, I think, whether to allow the use of instant replay for situations such as the end of the Italy-Australia game yesterday (althought I suspect instant replay would be a bridge too far for soccer).
A final, final thought--I do give the soccer bureaucracy a great deal of credit for one innovation adopted about 10 years or so ago, which is to change the scoring system to award 3 points for a win and only 1 for a tie (it previously was only 2 points for a win). This was a response to a perceived willingness of teams to prefer the risk-averse strategy of playing for ties and to encourage going for the win, and indirectly, to play attacking, offensive-minded soccer. Along with the addition of the three-point basket in basketball, I think this was an ingenious way of improving the game by changing the incentives of teams, rather than to change the rules in such a manner as to try to directly change the game. The emphasis on giving more yellow cards during this world cup, regrettably, seems to have been a much less elegant innovation.