I was actually having this conversation yesterday with an American.
In American schools they're taught that English is a phonetic language like Spanish, so they end up applying these rules they're taught to french words like "niche" and also to placenames, which is why they screw everything up. Noah Webster was an English teacher and he thought it would be a good idea to make the language more phonetic, but I don't think he realized what the consequences would be.
Whenever I get into this discussion, I always point out to Americans that they don't pronounce "Arkansas" phonetically. Placenames generally aren't phonetic, e.g. the Potomac River. Or Norwich, VT. Some placenames Americans have altered from their original English spelling to make them phonetic, e.g. Litchfield, CT, which was originally "Lichfield".
In Canada, the UK, etc. I think more emphasis is placed on the correct pronounciation, which basically means you have to learn how it's pronounced in some cases because it's not merely phonetic.
I find it interesting that in eastern BC a lot of people pronounce "Coeur D'Alene" as: Curr Dah Leen, whereas in Idaho they say: Coar Dah Lain. People in BC are correct, because it's actually a French word.
But a lot of people here pronounce Spanish placenames in the US incorrectly, e.g. "Nevada", which we pronounce usually as: Nurr-var-duh and they pronounce it: Nuh-VAD-uh.
In either case it annoys me when people say: "oh that's just how we say it here", but that doesn't mean that it's right! Just means you've copied loads of other people who've gotten it wrong as well.
Try talking to someone from Boise. Everyone outside of Idaho pronounces it: Boy-zee, but in Idaho it's pronounced: Boy-see. So who's right, the people who live there or all the people who don't?
Well actually they're both wrong, it's French and it's pronounced: bwah-say.

Steve.