I'm coming back to thinking about Indiana Jones these days. There are two reasons for this. On the hand, I never quite wrapped my head around the reasons for the failures of "Kingdom of the Crystal Skull", and on the other, I'm not entirely sure about the quality of the first three movies in terms of their topical sensibilities. Allow me to explain.
I usually assumed that the main problem with "Kingdom of the Crystal Skull" was that its main antagonists, the Russian ocmmunists lead by Cate Blanchett's character, simply didn't work as well as the Nazis did in "Raiders of the Lost Ark" and "The Last Crusade". It would be an echo, maybe, of "Temple of Doom", whose Indian anagonists also didn't exactly evoke the same levels of...what, exactly? What makes the Nazis into such good villains for Indiana Jones that the Indian exploiters didn't manage to reach? That the communists couldn't even begin to contemplate?
To tackle this question, we need to be clear about what Indiana Jones really is. It's by now almost a cliche to point out that Star Wars is a remake of the 30s era pulp stories like Flash Gordon, but Lucas' love for that stuff didn't end with the man. It also extended to another genre of these pulp stories, the adventure story (thinking about this way it's curious he never delved into detective stories).
In adventure stories, the white male protagonist strikes out into the unexplored regions of the world, usually Africa or Asia, and overcomes obstacles - nature, traps and indigineous people - to achieve some goal or the other. Usually, he will also meet and rescue a beautiful white woman.
Lucas updated these kind of stories for an 1980s audience. By leaving them ostensibly in the 1930s, he allowed himself to tell the same basic stories, but by making his characters decidedly 80s, he gave them a facelift that was sorely needed (much like the 1970s sensibilities of its main cast helped Star Wars overcome the inherent silliness of the approach).
The parallels to Star Wars don't end here. Like the galaxy far, far away, Lucas used fascist imagery in order to clearly differentiate the good guys and bad guys. We shouldn't be too concerned with the fact that the antagonists in Indiana Jones are literal Nazis; this doesn't matter. Lucas isn't concerned with history; he uses Nazis as an established cinematic shorthand for "bad guys" and inserts them in his settings despite it making not a lick of sense, given where these stories take place, and letting them be led by people who themselves are not Nazis.
But whereas this abstract language still works for new Star Wars movies today, it fell flat on its face for "Kingdom of the Crystall Skull", which tried to update the formula into the Cold War, mostly out of necessity to acommodate Harrison Ford's age. The reason for this, I guess, is that they mostly tried to steer clear of the most problematic aspects of the Indiana Jones story formula.
These problematic aspects are most obvious in "Temple of Doom", especially in its infamous dinner scene, but they permeate the other two movies as well. There is a lot of otherhing going on, in which exotic cultures are either helplessly awaiting the arrival of the white rescuer (Temple of Doom, again), extremely malign (all three movies), corrupt (ditto) or naive and forthcoming (ditto). What they are not, most of the time, is realistically or even empatically portrayed.
Let's face it, the old Indiana Jones movies were kind of racist. That's because the old structure on which they were based was PROFOUNDLY racist, and Lucas may have neutered that a lot, but again, 1980s sensibilities aren't exactly known for their progressive views on race. Lucas walked in the same trap with his prequel trilogy, where he again resorted to casual racist shorthand with characters like Jar Jar Binks or Watto. In a Science Fiction setting, it's not as painfully obvious as in this one, though.
I think that this is the deep underlying reason why the approach to continue Indiana Jones fell flat. There was a desperate need to sanitize the story of these unsavory elements as much as possible; however, this process also neutered it and robbed it of some of the elements that are integral to this story fomula. You just need this wiff of exploration and the exotic for this stuff to work, and the exoticazation and othering that's inherent in this approach is, rightfully, scorned today.
So the problem isn't with Cate Blanchett's communists per se. The problem is that the story feels out of place, and it feels like that because it is. Even a modern attempt at reviving the genre with a movie like "Sahara" - which I absolutely adore - failed spectacularily. Maybe it's just dead like the Western, fallen out of its time. Or, maybe, it needs some visionary to revive it by a hefty dose of revisionism. What surely won't work, though, is retracing the same worn out path.