This would of been way better in color

The characters in the movie inhabit a relentlessly dreary world, and the black-and-white photography communicates the bleakness better than color would have.

It was filmed in black and white to carry well with the plot, as well as depict the very bleak scenery in Great Plains territory. Face the facts, there isn't much color in that eastern Montana, South Dakota, or Nebraska landscape, especially during the time of year when this was supposed to take place.

Are you kidding? It is the landscapes that were why I liked the black and white! Landscapes nearly always look better in black and white (have you ever heard of Ansel Adams?) For the shots when they were in town, or in people's houses, color would have been fine.

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Having watched one minute of the colour version, I concur with the OP (despite "should of"). Even as I watched the black and white version, I could see it was just digital, and consequently it looks rubbish. I'm actually amazed that Alexander Payne is apparently so unaware that SHOOTING in black and white is a completely different thing to shooting digitally and then removing the colour. If you want to make a black and white film, you have to light it properly, and you should use proper black and white stock (which is incidentally a far higher grain/picture quality than colour film).

In the eighties an advertising agency wanted to make an advert like an old-styled British film, filmed in black and white ("Gertcha"). They hired a lighting director in his seventies who had worked since the black and white days of Ealing Studios (films made at Ealing and other British studios remained black and white well into the 1960s). When they looked at the set they thought the old guy had lost his marbles, because there was so much shadow you could hardly see anything on the set. When they got the film back, they were amazed. It looked brilliant and perfectly captured the feel of the 1940s films they were after.

I don't get any nostalgic feeling when watching Nebraska, it just looks washed out, and digital black and white has a kind of sheen to it which frankly hightlights the very thing Payne was presumably trying to avoid, ie gives it a sharp, clean, modernistic look.