For a OMB to really �compete� against a live band, the OMB has to be exceptionally good. For example let�s say you have an above average (but not great) OMB and an average live band alternating sets. Chances are the audience will respond better to the band. This will be especially be true if all the members of the mediocre band are good entertainers. The band of course has the advantage of number of guys/gals on stage. In other words it�s more visually appealing.
What if at that German festival that you went to had a OMB that was as bad as the live band that you described? I�m pretty sure the OMB would not have gotten the enthusiastic reaction that the lousy band did.