Personally, I like the new form of difficulty better. And I'm not judging it based on your standards. I'm judging it on fairness. I'll compare two games you'll likely have never heard of, but they're of the same series, just about 15 years apart.
Story of Eastern Wonderland: The stages are short, your character is slow, the bullets and pickups are fast, there is no slow movement key, and bosses are often bullshitty. However the patterns are much simpler and easy to read. The lives system isn't very generous but is rather easy to use. Bombs are reset to three after every death. Deaths do not affect Power very much. Continuing starts where the player died.
Undefined Fantastic Object: The stages are longer, your choice of shottype is much better with multiple movement speeds. Lives and bombs are more common but there is more risk to getting them. Bombs are retained after each death unless below three. Death is very hard on Power. Bullets are larger, more varied, and the patterns are much more complex. Continuing restarts the stage. Hitbox is visible during focused movement.
Of the two games UFO is far superior. SoEW relies a whole bunch on Fake Difficulty to beat the player due to crappy hitbox programming, enemies colliding with the player, bosses doing things that would be impossible to avoid without foresight, and just overall unfairness. UFO on the other hand is difficult, but it's not for unfair reasons. The game doesn't try to trick you often and while it would be incredibly difficult, it is possible to win on a first attempt on any difficulty.
The difference between the old difficulty and today's is how fair the games are being. Lots of older games are difficult for unfair reasons. This is what makes I Wanna Be The Guy so hard, as it emulates the cheapness of the games it references.
