That is actually a bit more complicated.
(1) Germany traditionally hasn't done "elite universities". Even in the early 20th century (i.e. until about 1933), when Germany was a Nobel Prize factory, it was often individual departments that stood out (such as mathematics in Goettingen), not universities in their entirety. There's currently an attempt to change that (Exzellenzinitiative), but we'll see how that goes.
(2) Until a while ago, it was difficult to become a full professor at a German university unless you were German (because you basically became a civil servant, part of the requirements for which was citizenship); German also wasn't the lingua franca of science anymore after WW II, which made it difficult for German universities to attract foreign academic talent.
(3) In lieu of elite universities, Germany these days has hundreds of research centers (such as the Max Planck Institutes), which do attract the cream of the crop.
(4) High college rankings do not actually seem to translate into better adult education [1]. Part of that is, of course, that American students enter college with 1-2 years less education than other developed countries [2], and that's really a problem of secondary education. But on the other hand, a Bachelor's degree in many European countries takes only three years instead of four (in part for that reason), so that should compensate.
In this context, it's worth noting that the methodology that the THE uses for calculating the teaching score is imperfect, to say the least. It comprises the following factors [3]: (1) a survey of the perceived prestige of the institution, (2) staff-to-student ratio, (3) doctorate-to-bachelor ratio, (4) institutional income compared to staff numbers.
While I do think that the German university system could be improved upon (no secret, pretty much all German professors I know think the same), this is an apple-to-oranges comparison: especially at the undergraduate level, there are fundamental structural differences in the two college systems that renders most of these factors meaningless as a basis for comparison.
[1] http://www.nytimes.com/2014/06/29/upshot/americans-think-we-...
[2] http://www.vox.com/2014/7/5/5868791/does-america-have-good-c...
[3] http://www.timeshighereducation.co.uk/world-university-ranki...