I think it's the HD age we live in (of high production values), as well as Eli Roth's fault. See, many of our favorite horror films were kind of ass relative to their Hollywood peers in terms of special effects, acting, and script. That was the magic of it, and what made them so endearing. These days, that shit wouldn't get past the radar and end up in theaters. There's a certain "crispness" and "cleanness" that's expected that doesn't work with the horror movies we love best. Paranormal Activity was finally a compromise in this regard until they milked it and made it shit. Survival horror in video games are suffering from the same issues in the console space. No publisher is going to consider tank controls okay, and they expect HD graphics with "crispness". It just makes horror feel wrong. I'm sure if you rendered Silent Hill Homecoming or Downpour on the PS2 and used fog effects to hide the draw distance, they would end up twice as scary and no fucks would be given about the graphical fidelity.
Also, the second part of my argument is public perception. These days, horror=torture/gore porn, and that shouldn't entirely be the case. Hostel was a major part of this shift, and why I blamed Eli Roth. The first Saw was somewhat smart, offering poetic justice to Jigsaw's victims and offering cerebral elements outside of the torture porn. Again, once we saw annual Halloween appearances is became all about thinking up different ways to torture and dismember people in the most realistic and high-fidelity way possible.
Like the answers to most of these problems, there's the indie scene. Penumbra/Amnesia probably wouldn't have been made through a traditional publisher, and it did most things right. We're starting to see a resurgence of the genre in video games, mainly through indie developers and kickstarters. Hell, even Resident Evil: Revelations decided to do a lot of things right (totally picking that up for the Wii U).
On the movie front, I don't know. Even the reboot of Evil Dead was pretty much high fidelity torture porn, and the solution to what makes horror right has been this "found footage/fake camcorder" bullshit. I'm not really much of a movie guy though, so there might be more going on than I know about. I'm sure there's plenty of low-budget quality horror films on the independent circuit, but by nature those are hard to find and become aware of.