The Magic ranked 2nd in points scored per pick-and-roll possession and 1st in percentage of pick-and-rolls scored on. The Hawks ranked 6th-worst in points per possession allowed when defending the pick-and-roll, and 3rd-worst in percentage scored upon.The two questions, "Why don't they defend the pick-and-roll well?" and "Why do they switch every screen?" have the same answer: the Hawks have no guards who can stay in front their man. Thus, Mike Woodson tries to minimize their involvement in defensive possessions and maximize the involvement of the two good defenders in his employ: Al Horford and Josh Smith. That strategy can work against teams which struggle to make jump shots, have less-than-ideal spacing, or use the big man who sets the ball-screen just for that purpose. Orlando makes jump shots, pays great and valuable attention to their spacing, and send Dwight Howard to the rim to receive an alley-oop over a guard if the Hawks switch the ball-screen.
I don't follow the Hawks closely enough to know exactly why they can't handle the pick-and-roll, but I do know--as does everyone by now, I suspect--that they switch every screen. I imagine that tactic figures heavily into their poor showing here.
This problem isn't going away, though the series soon might.