it could also have to due with microphonic feedback. with a huge audio system, like those used in arenas and outdoor venues, you get allot of interference from radio waves, monitor signals, wireless units, high gain amps, microphones, video monitors, etc. a live sound is only as good as the house PA.
here's an example. plug in your guitar, turn on your amp, turn the voulme pot on your guitar to 10. now stand next to your TV, or computer monitor, or talk on your cell phone. liten to the microphonic feedback from your guitar. now turn off all devices that send or recieve aay kind of signal, ie tv, radio, phone, monitor. now your guitar is considerably quieter, well it should be at least.
live shows can sound great, or like crap. most of the time it isn't the artist.
case in point: i've seen all of the G3 tours. the first one with eric johnson sounded awesome, the second one with JP sounded OK, and the last one with Yngwie sounded like poo when yngwie played, and alittle into Vai's set, then the probem was fixed for the jam set.
another thing to consider is "live" recording. this is a completely different animal from studio recording, and uses different equipment. it's really hit or miss dude. If you ever get a band together and play at 20 or so different bars, parks parties, gyms, and outdoor venues you'll know exactly what i'm talking about.