I have been coming to Thailand for near on 5 years now and I have noticed that the best speakers of English are those that need to use it for work. These are predominantly young people from wealthier backgrounds who have studied English at university as part of another course and have become proficient in using English in their jobs.
These people are found in areas where tourists tend to stay. Jobs that deal with tourists require their staff to be somewhat proficient in English. But on the whole, English is not spoken widely, especially out in the provinces. The state school system does not seem to teach English effectively, concentrating on learning words by rote rather than comprehension of colloquial English sentances.
The best schools seem to be those that can immerse the students in English. I have had to learn Thai in order to be able to communicate effectively since the vast majority cannot understand spoken English and most people can only say a few words like "Hello, how are you?".
Pronunciation of English poses a real challenge because Thai lacks certain sounds like th, sh, z and Thai words and syllables that end in certain consonants mutate to sound like p, t and k. The Thai word for shallow fry for instance is written like 'pad' but is pronounced like 'pat'. The letter d in all instances (there are several different sorts of letter d by the way) mutates to a t at the end of a word. So Thai people have difficulty pronouncing words and syllables ending in d, ch, th, s, sh, r amongst others.
I think it is a question of confidence and also culture. You see, Thai people do not like to embarrass themselves because this is like losing face, an important feature of Thai (and Asian) culture. They would rather not say a word of English than risk making a mistake and embarrassing themselves.
Thai children do not seem to have the same motivation or eagerness to learn English compared with their peers in China for instance. It is frustrating to see the way that English is taught and the lack of emphasis on effective teaching methods. Perhaps this will improve over time, but for now Thailand is lagging behind in English.