I disagree with the OP. Technically yes games are far superior today but the content leaves a lot to be desired.
It's not all because of nostalgia though. Dated graphics and audio leave a lot to the imagination.
I still get scared when monsters sneak up on me in
Dungeon Master. I've never played any other RPG that could do that. I guess it's because everything nowadays is realtime and ultra realistic. We hear everything surrounding us, we can see everything from greater distances. There's always pompous background music playing to make you aware of what's happening. Time in a game is pretty much on par with
Time in the real world.
Older games couldn't support that so the games had to be designed around those limitations, it was okay to break the laws of physics (by a great deal) because the games weren't aiming to be realistic. It was based around intuition rather than realism, kind of like your thought processes in a dream. Meaning a mummy could just pop out of nowhere and scare the bejeezus out of you, and it would still be believable.
If that happened today people would think it was a bug, not that the Mummy simply sneaked up behind you.
I think it's really dumb to completely ignore those ideas simply because we have better hardware. Look at Abe, they innovated in 2D when everyone was too busy going 3D. Why is that?
How much raw power the game can run on shouldn't matter. As long as the game is believable, it works, and believability is a very different thing from realism.