Well, a book that is getting majority average-or-better ratings is coming out so near the bottom of the list because other books have an even higher percentage of average-or-better ratings. So yes, even the books toward the bottom of the list aren't necessarily considered bad, they're just being relatively less well-liked than others.
That and the rest of your points are sound. It's just that as someone with an interest in the meaning and usage of words, I find it paradoxical that a book voted "average" and "above average" can end up below average. Clearly there are two different metrics for "average" being used here. I suppose that in the opinion polls, it's "average" relative to all the works of fiction the voter has read in their lifetime -- so something that's above the average quality of fiction as a whole can be below the average quality of Trek novels, at least in the minds of those who choose to vote.