You have a point. Movies have spoiled our language and hence the use of foreign words. There is an effort going on to revive Sanskrit, but it has not reached a level where it can be declare a national language.
May be you are right that many in South understand pure Sanskrit words, but I don't think if that's sufficient (communication wise).
I think every language must be respect and individual's must do their part. Language should be the unitying force and not the other way.
