[Hack&Lube]

It's open source, the specs and libraries are open source and free of charge. Mp4 is technically not even though you may be able to get it and it's tools for free.

MKV has better GUI and muxing tools and is easier to use. The process is less error-prone with less sync issues.

MKV supports more formats. It can do AC3 streams aka Dolby Digital and VobSub DVD subtitles and multiple audio track switching, etc. You can't put 5.1 AC3 into MP4 without transcoding to AAC or some other Mp4 friendly codec first. These features are highly valued for total rips including foreign language and bonus tracks etc. While both formats support embedded text-based subtitle streams, playback of timed-text substreams in an MP4 container cannot be done using a standard filter while still keeping them readable. You may only ever watch one video source with the english audio but to others, this is important for foreign films, anime, etc.

With the above, you come to the real reason and that is that you are obviously watching pirated TV and movies. Therefore, you are relying on scene releases. The scene is not just American, a vast majority is based in the Netherlands, Germany, Sweden, Russia, etc.

Again, since it's "the scene", this is an underground movement and a lot of cred and secret handshakes, etc. between members is to show off technically proficiency, use of open source software, use of unique formats, etc. Rather than pandering to the masses. If they were interested at all in getting media to you that you could easily use, then everything would be in DIVX or XVID (some groups still release in these easier to use formats) or Mp3s instead of OGM (Ogg Vorbis) and lossless formats.

Your basic problem is that you are looking at the wrong releases. There are several groups that specifically release for Xbox and iphone, etc. in smaller and compatible formats. If what you are looking for isn't available in these formats, you are expected to have the technical proficiency to be able to convert them.