The game offers more stuff at levelup than in 1E/2E so people look forward to it
Which classes are you talking about? Mages and clerics get awesome stuff at level-up in AD&D - new spell slots every level, and new spell levels every second level (or so - it's a bit wonky around name level).
Todays gamers are expecting more instant gratification.
This makes no real sense to me. Game playing is, in general, a form of gratification, which takes effect immediately upon playing the game.
Of course some games reward practice and mastery (eg chess) in a way that others don'd (eg Monopoly), but in the case of D&D this is much more about adventure design and GM practices, than about player attitudes. There was "low skill" D&D being played back in the day just as much as there is today: look at all the rants against "lottery D&D" that one can find in the publications dating from the late 70s/ealy 80s.
Because instant gratification design tends to devalue the whole product as rewards must be tossed out for pretty much everything to keep the player interested
Well, playing the game should be rewarding. It's a voluntary leisure activity - if it's not rewarding, why engage in it?
If part of what a person enjoys about the game is mastering a certain build, then letting that person change build from time-to-time (eg by levelling) makes sense.
If part of what a person enjoys about the game is seeing the scope of the story develop and escalate, then letting such escalation take place (eg via PC levelling) makes sense.
You seem to be thinking of levelling simply in terms of "bigger numbers", as if that is self-evidently a meaningful thing. You don't seem to be analysing what levelling actually means for the experience that a player has in playing the game.
failure is not tolerated at all. That limits the type of stories you can play somewhat, usually a shallow black & white (doesn't require too much thinking) combat heavy (many fights mean many rewards) railroads (to control the pacing so constant gratification is ensured).
Whose game do you think you're describing here?
Why would a game with steady levelling have to be combat heavy? Others can comment on 3E/PF, but in 4e XP accrue for a whole range of gameplay activities, of which combat is only one.
Why would a game with steady levelling have to be a railroad? In a system in which XP are awarded whenever the players engage the ing-game situation via their PCs (4e is an example of such a system), the players (tautologously enough) earn XP by engaging the in-game situation via their PCs. There is no connection between that sort of active, engaged play and railroading. In fact, that sort of player-driven approach is a standard prescription in anti-railroading game advice.
Why would a game with steady levelling be inimical to thinking? If XP are earned by engaging the in-game situation via active play of one's PC, then thinking will be a pre-requisite for earning XP.
My game involves steady levelling. It is not a railroad. It requires the players to think. It is not remotely hack-and-slash. (And from that minimal description, you couldn't tell whether I'm GMing 4e or Gygaxian AD&D.)
the mechanical performance of the PC construct has a much larger impact on in-game success than it used to. Player decisions thus become more valuable during character building and level-up than they do during actual adventures.
It is perfectly natural for players to focus on the parts of the activity in which their personal input matters most. In modern D&D these activities are building the character and making choices at level-up time. During an actual adventure its just a matter of pushing the buttons that you selected at your last decision point.
The bits about player resources I agree with as far as non-casters are concerened - PC build has increasingly come to occupy the functional position that, in the old days, was occupied by magic items. For casters, build choices (including daily memorisation choices) always mattered.
The bit about "pushing buttons" doesn't resonate with me at all, though. At least as I see it played, choices made in play during 4e are as significant as choices made in play during AD&D. (Although sometimes the subject matter of the choices is different - eg AD&D cares far more about PC gear as a player resource than does 4e.)