There hasn't been an acting nomination since Alec Guinness in 1977 - it's time. Atitudes are shifting. Though the first two prequels were enormously successful, there was so much controversy and carping about this n' that; the mixed ideas didn't allow it to even win tech categories like Visual Effects. But now, with the acclaim this film has gotten, and the reaction from some critics like "The Magic is Back!", or "Oh, That's where George was taking us!", things seem to be mostly forgiven.
It's interesting - this is the fifth time Ian McDiarmid has played this character, counting his holo insertion into The Empire Strikes Back DVD, and the best stuff for him has been saved for last. First appearence in Jedi, he was cackling evil, as we finally met the guy Vader called master. In the first two prequels, he was a thoughtful and practical senator-turn-chancellor, with a secret smile that was unexplained.
His gradual revelation of himself to Anakin, as he coaxed him over to his point of view, was so riveting I was on the edge of my seat, and I knew what was supposed to come. That's the difference - we may know intellectualy, beforehand, what happened to Anakin and the Jedi order. But to see it being acted out was like LA Weekly stated: like a childhood myth made horrifyingly real. When Palpatine finally reveals his power and explodes into action, he is more evil than I could have believed. So corrupt and full of joyous hate and malevolence; his transformation process, the duels, the way he states the line "And...We shall have...peace" with that gleeful, hateful smile - it made me think of Anthony Hopkins, playing Hannibal Lecter for the first time.
He SHOULD be nominated, at least.
Not only does the Academy not like Lucas, the feeling is mutual. Lucas doesn't really care about honors and stuff like that.
I'll bet if he did care, he'd campaign a lot for it. Sometimes oscar nods get a "buzz" going, and where they start is a little unknown, it's just people talking and emailing and soon enough there's a rumor mill going. It's how LOTR III won best pic even though it's a dreadful film.