I think you've got some legit criticism of weaknesses with the OS approach when the DM isn't good, but the section above seems really off-base. Is it a logical consequence of following a document which advises that "PCs should seek treasure and avoid unnecessary fights" to only award xp for combat?That's not a modern mindset. It is the logical consequence of the values advocated by the Old School Primer when the DM isn't good. And part of the point of most of the various more modern mindsets is to get away from this sort of nonsense.
- Rulings not Rules was followed to the letter with the DM making rulings in place of reactions and morale rules.
- Player Skill not Character Abilities - IMO the only arguable point on this list. He didn't seem to have much time for character abilities...
- Heroic not Superhero - he was killed by a Random Act of Bear. A superhero would have coped.
- Forget game balance - part of the point of game balance is so Random Act of Bear doesn't kill people out of nowhere. And another part is that RPGs aren't balanced to a 50% win rate - they are balanced to where the designer thinks they are most fun. "Forget what the designer considers fun" is not good advice
Rulings Not Rules was not being followed to the letter. Ignoring rules which serve a purpose is not something Finch advocated. A DM following Rulings Not Rules as Finch lays it out would rule that monsters do sometimes run away; certainly intelligent or animalistic ones.
Player Skill Not Character Abilities was being specifically contradicted, most obviously by disallowing any engagement with traps outside Thieves' percentile skills.
Heroic Not Superhero certainly doesn't imply "randomly killed by a bear with no choices involved". Come on, man. A hero would at least have a chance to see it coming and mitigate the danger, even if he was wounded and unable to knock it out with a swift punch to the jaw like a superhero.
Forget Game Balance doesn't say or imply anything about ignoring what the designer considers fun, either. :/
I think you're absolutely correct that OSR play relies on a GM who can make organic rulings which feel both fair and fun to the players. And that the greater degree of reliance on GM judgement in pre-WotC editions does make them more vulnerable to a bad GM creating a bad play experience. The Old School Primer is a bit dated and I can see flaws in it, but it really doesn't say what you wrote above.