Why is the off-air antenna local picture so much better than the Dish OTA HD ?

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Unnecessary comment - In the beginning before it was determined he had the same problem on TWO 622's, a defective 622 was a distinct possibility and needed to be ruled out before determining anything else at fault.

As it turns out, the OPs signal is so low through the 622 it's no surprise that his picture has artifacts and dropouts, his main complaint.

Well that's not exactly what the OP said:
Yeah, neither of my TVs uses a 100-point scale like the 622, so I don't know how to compare the signals, but I can tell you that I rarely get anything more than about mid 60s on the 622. But even when the signal has no problems I can see, the picture is worse when it passes through the 622. More "blurry" and less well defined..

In addition, the low signal strength on the 622 is part of the issue I pointed to in that Dish isn't using the latest and greatest ATSC tuners in their receivers. That means the Dish receiver's ATSC tuner has more problems with signal strength and multi-path. It isn't surprising that the OP's HDTV does a better job with OTA HDTV PQ than does the 622. What is surprising is that he calls it a dramatic difference. I don't think anyone else in this thread has noted a dramatic difference between a Dish HD receiver's OTA HD PQ and another ATSC tuner's OTA HD PQ, except for my comments regarding the Dish 811, which actually did have a dramatically poorer HD PQ with live OTA than does any other HD receiver or TV that I use.
 

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