Assuming this is true, how often does a horror RPG reach actual horror, as compared to terror? How often do they just go for revulsion?
Actually, terror is the harder thing to achieve. To achieve terror in a game, you have to actually physically scare the player at the table.
It is my personal opinion that you should never go for revulsion. Gore, schlock, squick and the like should never be your goal and if you find yourself reaching for that palette it is an indication of laziness or weak themes. Revulsion is something your fiction will achieve if you deal with evil frankly, but subtly is almost always better here than gratuity either in your depiction and maybe even more importantly in the manner by which your players come to the realization of wrongness. You are far more likely to achieve terror and horror if it dawns on the player through subtle clues what evil has transpired here, than if you depict it in an over the top manner.
Further, the emotion I think you most want to inspire when using elements of revulsion isn't fear but righteous anger. The recognition by the player and character of the depravity that has occurred should motivate a desire to right the wrong that has occurred. Where this all goes wrong with gratuitous depictions of gore, violence, and depravity is that you risk either indifference or fascination. There is always a chance that you'll end up creating neither horror, nor revulsion, or anger in response to depictions of violence, but a vicarious thrill and a voyeuristic response to it.
In the TV show 'Gilmore Girls', there is a I think a scathing inditement of modern TV by one of the characters - Emily Gilmore. She says, "I don't watch that much television. I don't find forensic work quite as fascinating as the rest of the world." I think it's pretty clear that modern TV doesn't inspire terror or horror in the views, only fascinated revulsion and probably increasingly little of that. The danger here of course that a DM faces is what every author faces with graphic depictions of evil - eventually you make the shocking banal and to produce a similar degree of revulsion now requires you to continually take it up a notch. Eventually you can go nowhere but Boudelaire or worse De Sade.
To a large extent, I think most mainstream RPGs have managed to avoid merely going for revulsion. Probably the major exception would be some of the work of White Wolf, particularly under the Black Dog label and some of their adventures for the VtM line. Chill in particular involves legitimate scares with only occasional revulsion. CoC likewise doesn't mainly rely on graphic depiction of violence for its main scares. Sure, you can get there with both systems - alien paracitation or cannibal spirits - but its not the main way to get terror out of those settings and in both cases the subtle depiction is as scary or scarier than a graphic depiction. Both settings play on the slow dawning realization of the investigators as the primary source of fear.
