Why was this show recorded on such bad film???

I don't know if the film was bad or if they got rerun so much, they wore out (and hadn't made as many copies as 'I Love Lucy').

I don't have a good answer, but it depends on where you buy the tapes. Moviesunlimited has better quality than some other places.
Also, when O&H was filmed, they used movie quality film, so it should be better. Ozzie was pretty high-tech for the time. Did you try adjusting your VCR tracking? On tapes I got from Edcuation2000, the quality is poor.

It was bad operator on the controls of the film. Only the LA area was able to get the best version of the picture because the person didn't know how to keep the right perspective and quality. Don't adjust your set.