I side firmly with the German restaurants on this one. Going out to eat with one's family or friends is not just a time of sustenance; instead, it is meant to be a time to relax and enjoy the company of one's dining companions. If the music is too loud, it's hard to hear and it's also unpleasant to have to shout to be heard. Since the focus is on conversation and a relaxed evening, it's not a surprise to find that many German restaurants don't play music.
On the other hand, many American restaurants do, and it can create quite the cacophony! The music is often rather loud and patrons have to speak louder to be heard over it. As it is, Americans are considered to be loud, but who knows if this is a chicken or the egg question as it relates to noise at restaurants.
I would much rather meet my friends and dine somewhere without music. I'm there to spend time with them, not to try to yell over music to be heard. I was at a hotel restaurant in Minnesota and could barely stand to stay there. We were seated in the corner and had to listen to a staticky radio station playing country music (which I abhor) while the bar that was through the French doors was blaring rock music. Meanwhile, the kitchen was playing its own station! It was an awful, loud mix of everything. I let the waitress know that it was a bit overwhelming to be able to hear three loud radio stations in one spot and asked if she could do anything about it. She did get the kitchen to turn down their music a bit. However, it was still loud and distracting. I gave up at that point and we quickly finished dinner.
Give me the peace and (relative) quiet of a German restaurant any day over this!