I don't think it's fair to put Lubitsch in that category. Sure he made a few German films, but his greatest period of productivity occured outside of Germany. I mean say what you will about Passion, but Trouble in Paradise is a better film.

Perhaps we can get another thread going for Lubitsch, certainly his work is worth discussing.

Now Lang and Murnau are a fair group to make comparissons (especially considering Herzog was a self proclaimed successor to Murnau). Although Murnau's best film might have been made in the US, he was still principally a German. Lang, who had a very long and prolific career in Hollywood, is arguably the best of all German directors. I believe that his rather brief period of productivity in Germany is one of the greatest canons in film history. Perhaps Destiny doesn't quite match up to The Big Heat, but as a unified body of work, Lang's German phase clearly outshines his Hollywood days. Which I believe may have had something to do with the level of control he had in Germany vs. Hollywood. Once in the US he and his wife stopped writing their scripts (at least officially). Plus the old studios certainly kept a tighter leash on him.

Anyways I'm getting off subject, but overall, I probably will have to say that Germany in the seventies was Germany at it's cinematic peak.