Do you think every film needs Foley? Should it be included when you're budgeting?
At the budgeted level a complete audio post is performed. Everything between lines of dialog is removed to another track and muted. The dialog is edited. Perhaps ADR is done. Every action is Foleyed. Every sound is replaced with a sound effect. Ambiences are constructed. Source music and the score are spotted. Then everything is mixed together.
So, as you see, it's not just Foley. There is a complete process performed on the film. Most talented, passionate filmmakers are control freaks, and a detailed audio post production is just another reflection of having total control over the final product.
The biggest issue with film sound design is to make it sound "natural." Most human beings never notice their sonic universe; they are only aware of sounds that require conscious attention, such as conversation or emotionally involving sound like music. The other sounds of which we become aware are "emergency" sounds that relate to our fight or flight instincts. The old cliché "it's too quiet" is directly related to basic survival instinct; something that is usually there is missing. We'll always turn for a human scream or an angry animal. We have been conditioned to respond to technological emergency sounds like sirens. But otherwise we almost totally ignore our aural surroundings.
The reason I point all of this out is that unnatural (or poorly edited) sound pulls the audience out of the illusion being created by the filmmaker. The audience is often unaware that sound is the issue, all they know is "something is wrong."
Now, as a sound editor/designer I of course have my obvious bias. But if you look at the films that you love you will probably find that great attention has been paid to the sound of the film.
You may find this article of some interest:
http://transom.org/?p=6992