Cinematic Believability

This is an argument that I've made several times, and I was surprised, as I went through my blog history, that I haven't posted it before. Essentially, there are two ways to make fiction believable: realism and plausibility. Many people confuse these, but they are quite different: realism means that the story generally conforms to the nature of the "real world"--that is, no elements of fantasy. Plausibility means that, whether the story requires an initial suspension of disbelief or not, it progresses in a believable manner from it's own viewpoint.
The movies that I generally use to contrast these elements are Pumpkinhead and I Know What You Did Last Summer. Both movies are about revenge taken on a bunch of teenagers after they cause drunken motor accidents--Pumpinhead then focuses on plausibility without realism, while I Know focuses on realism... without much plausibility.
In Pumpkinhead, a group of teens passing through a small rural town kill a small boy while racing their dirt bikes while drunk. The story then progresses unrealistically, as the father of the boy makes a pact with a local witch to send a "demon of vengeance" after the offenders. If one can suspend disbelief and accept that this happens within the world of the movie, the story then progresses both plausibly and interestingly.
I Know What You Did Last Summer begins similarly: a group of teens drinking and driving hit a Maine fisherman and then leave him for dead, attempting to hide the body by tying underwater. While this is a much more realistic scenario, for the story to progress we must then believe that the fisherman managed to hold his breath underwater--not only long enough to untie himself, but while unconscious. Said fisherman then waits a year, finally going on a rampage both sociopathic in nature and requiring superhuman strength.
While this approach may appeal to some viewers--and both of the above movies have their own "cult" followers--it is worth noting that the three biggest American horror franchises (Friday the 13th, Halloween, and Nightmare on Elm Street) all opted to forego realism.