Question: I'm in Western Europe doing a Master's degree, and I expected the education quality to be much higher then what I've seen in my previous school which was in the Middle East, but some professors here still do this (taking exam and exercise questions from the internet) and they don't seem to understand the subject very well.

Now how common is this in European and North American universities? Is it even considered an accepted practice?

Answer: 
*they don't seem to understand the subject very well.*
You sound like you are in a level of expertise that you could judge the quality of the lectures. You may then ideally speak to the professor about your allegation *they still do this.* I am ignoring the regional limitations and considering the question in a general context.

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> Is it even considered an accepted practice?
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Assuming that there are no institutional guidelines that goes against assembling questions from the internet(which you must check if you haven't done already!), from a logical perspective viewing this as a student, the practice is similar to posting questions from the text book or peer reviewed journals. The professor in any case is responsible for the question and its relevance can be questioned with supporting evidence. 

From the point of view of a student, you could also do a student peer review about the quality and relevance of the question supported by discussions and critical reasoning. If the result of such an assessment goes against the question, you could then report him/her with proof your views about the practice.

NOTE - This is not limited to *internet based* questions but also any questions even from the sources you think are authentic.
You get questions (and ideas for questions) from many places. Some you cook up yourself, others you water down from a step in a paper (even a very old one), or filch from a published exam, or a textbook, or even adapted from StackExchange. It varies. One of the selling points of textbooks is precisely that they provide lots of questions.

You should make up an exam by combining questions that (more or less, probably weighted by importance) evaluate the material covered. In my case of some 5 questions 2 or 3 are self made (probably inspired by previous ones or external sources), while the others come from different sources, often severely modified.