I'll assume that Koggit is earnest in his confusion.
The Wii Remote has two methods to detect motion. A accelerometer and the infrared sensor. The accelerometer detects motion in straight lines on three axis. The infrared sensor detects orientation with respect to the sensor bar above or below the TV.
The Motion Plus device adds a gyroscope to the mix to double detect angular or twisting motion in the device. It also adds a second accelerometer, but that is used to calibrate the gyroscope.
Before some games simulated twisting motions by reading the two light points from the sensor bar. Even the Wii home page firmware does that, which is why your cursor rotates in a circle if you twist the Wii Remote in a circle while pointing at the screen. But, as I assume you are guessing, if you point your Wii Remote away from the sensor bar it has to rely solely on the accelerometers, which do not do spatial orientation. You can try to guess from the X, Y, and Z data, but it appears to be very imprecise.
So, why wont Motion Plus improve existing games? Because the data isn't an improvement in detail of any previous data as the accelerometers and infrared sensor will still provide the same data. Motion Plus rather adds an additional set of values the Wii can poll for use in game.
Why wasn't the gyroscope included originally? Largely pragmatism, as Nintendo couldn't get what it needed in the size, quality and quantity for use with the Wii Remote.
I will toss in a bit of a lament regarding Motion Plus, as the Motion Plus only adds data for the Wii Remote, which is limiting in that the Nunchuck is still limited to just an accelerometer. Meaning that in Wii Sports- Jet Ski resort the suggested motion of twisting the Nunchuck is largely just for show.
Edit: I wanted to post a link to an Iwata Asks page that explained this further, but it appears to be down when I use the links I'm finding on Google.