My general thoughts on the subject...
Even though some of the people in my groups sometimes wistfully talk about 2E and how it had "soul" (while, implicitly, 3E doesn't), rationally, I think 3E is very similar to how 2E was. By extension, I find it easy to believe that this is how it always was.
The things where it's different:
We were all younger then, and the game was newer. We were 15, now we're 25. Some people were 25, now they're 35. Whatever. We're all getting older, and our opinions change, and familiarity breeds contempt. It's not 3E rules that make mind flayers not so scary anymore, it's the fact that you know exactly what a mind flayer is, and that you've already played in a dozen games that used them.
The incomparably tighter and more logical ruleset, which has the side effect of people not bothering fixing what ain't broke. Which, after enough games, can induce a more mechanistic and cold atmosphere of slavish adherence to the rules. For example, in 2E, I remember the DM rebalancing the characters every other session: when the toothpick-specialized fighter started feeling useless, well, we happened to find a +2 toothpick; when everyone else had gotten something, my bard learned the bladesong fighting style, which gave me the option of choosing each round whether I'd have +2 to attack or +2 to AC or a spell and a melee attack in the same round. 3E does encourage lazy DM-ing and playing in that you have guidelines for how much reasure people are supposed to have, which monsters they're supposed to be able to kill, different characters of equal levels are supposed to be equally powerful... but I think it's a rather convoluted argument to claim that the older rules were better because the older rules were crappier so they required more effort and attention from everyone.
The settings seem to be getting tigher and more logical, too, but I'm not sure this is a truly good thing. This is just a general impression, but I feel that the D&D of old (wherever that might have been) didn't have any qualms about mixing Zeus-worshipping bronze-breastplate-wearing longspear-wielding people with black-clad ninjas with warhorse-mounted knights with a red cross on their white tabards... if it was in a fantasy book or movie, it had a place in D&D. Nowadays, the trend seems to be to fit elements into the setting, so that while ninjas still consort with crusaders, it makes some amount of sense, within the context of the setting at least. This does have the negative effect that world sometimes feel more like SF settings than fantasy settings: more attention is given to internal consistency that emotional kick, which is arguably ultimately futile for a game with magic missiles and beholders, so that more is lost than gained. Eberron is a prime example of this kind of world, but pulls it off remarkably well, partly by messing only with the surface and keeping the core concepts more or less intact (the Aerenal elves are still tree-hugging possessors of ancient magic, even though their undead fetish means they look nothing like FR or Tolkien elves) or by presenting pulp emotional kicks under a fantasy veneer that fits the world (the Mines of the Giant King Solomon in Xen'drik, the insidious psionic Dr. Fu Manchu and the Riedran peril).
Eh. I now reread what I wrote and it sounds a bit confused. :\ I hope at least some of it gets across the way I meant it...