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It is dialogue that is not so much bad as to exact, not oblique enough.
Good Dialogue (LAWRENCE OF ARABIA):
Scene - Sharif Ali is insulted by TE Lawrence
ALI
Or is it because we are a little people, barbarous and cruel?!
Same Dialogue, On the Nose Version:
ALI
You don't respect me, or my people!
See the difference? Choose any film with genuinely great dialogue and you will find that there are almost zero occurrences of "on the nose" dialogue. Take for example BODY HEAT. This great exchange between William Hurt and Kathleen Turner:
HURT
I want someone who'll rub my tired
muscles and turn down my bedsheets.
TURNER
Why don't you get married?
HURT
I only want it for *tonight*.
This is just before she goes back into her house, he breaks through her sliding glass door and they screw like crazy. Here's the on-the-nose version of the same dialogue:
HURT
I wanna get laid tonight.
TURNER
Ok.
Now that's a bit of an extreme, but you get my point. On-the-nose dialogue is one of the hardest things a screenwriter has to work at to avoid.