Mind you , Kubrick kept the tradition alive and well recently with "Eyes Wide Shut"by recreating New York at Sheperton Studios England and using second unit establishing shots of the real New York and doubles for Cruise in the long shots and so on.
The trend now seems to be to create whole cities and countries in the studio or backlot with the aid of CGI! Or else have another city or country stand in for somehwere else! I think films are returning more and more to the tradition of working within a studio even for exteriors, just like the old days, but now the sets can be augmented with CGI. The American audience may have an idealised and mythical view of London based on how it is depicted on film, the equivelent for us Brits is perhaps our mythical view of a city like New York with many films set there actually filmed on the streets of LA or a west coast studio backlot, a trend still very much in evidence today, I happened to catch the end of "Phonebooth" on tv last night, set on a New York street but filmed in downtown LA. I think the reality is that filmakers will use whatever means at their diposal and within their budget to get the desired result. In Kubricks case going to the US to film would have seemed more logical, but then as we all know, Kubrick never liked to go too far from base camp in St Albans!
