The classic, black-and-white horror films by today's standards have a PG or G rating... which means that they are fairly tame. There is very little blood in Bela Lugosi's Dracula. Special effects in Lon Chaney's day were done by the actor himself. Horror films relied on the acting, directing, and cinematography to be frightening. Violence, when it was portrayed, was portrayed in the shadows, with only the scream of the victim and possibly some strange noises to indicate something horrible happening just out of sight. Despite these limitations, the classic horror films managed to create tension and fear in their audiences.
In the 1950's, special effects in horror films became the primary method for creating chills; with "living" brains in jars, half-human, half-fly murderous creatures, shambling beasts, mole-men, aquatic fish-men, and giant atomic monsters. The special effects were often created from whatever was on hand, with the artistry being in making the effect convincing on a shoe-string budget. Acting, story, and directing all took a back-seat to the special effects team and the costume/make-up department, but if the monster was convincing enough, then the film succeeded. Still, by modern comparisons, these films still garner a G or PG rating.
In the 1960's and 70's, color was common-place in films, adding a level of realism that did not exist in older films (and closing the door on a number of special-effects tricks that only work in black-and-white). Our society became more "liberated", opening the door to the on-screen depiction of drugs, sex, and violence... often violence so gory to border on the ridiculous. Aspiring special effects artists would study and attempt to replicate the violence seen from crime-scene photos, war-wounded images, and car-accidents. Nudity was used to draw the viewer into the story on a visceral level, and even without anything sexually pornographic in nature, I Drink Your Blood became the first film to earn an X rating purely for the violence displayed. The R rating became far more common than any other rating for a horror film.
In the 1980's, traditional special-effects wizardry had reached its peak, and directors such as Ridley Scott, Wes Craven, and John Carpenter would make use of all the lessons of the past decades to generate the horror-film heyday and introduce the "slasher" genre. These films far out-stripped all past offerings in violence, gore, and sexuality, but shifts in our society's perspective allowed these films to receive an R rating (though some just barely and others, like Angel Heart, only after editing). Another interesting aspect of the film industry was that, despite the rating-board deeming that these films should only be viewed by person 17 or in the company of an adult, teen-boys remained their primary audience. Movie-houses were more concerned about profits than enforcing the rating-boards recommendations.
Then, the outcry in the 1980's from parents and a variety of advocacy groups calling for censorship and political correctness in the media lead to the horror film industry striving to cater to these requests or face regulation. Horror film franchises, such as Friday the 13th, which had made there mark with their violence and gratuitous nude scenes, began restricting the amount of blood and eliminating nudity altogether in their films. The result was a number of bland films that did not compare to prior installments. Most franchises quickly reversed their decision to produce films that catered to the special-interest groups and instead made films that people would pay money to see.
In the 1990's, those same groups, having failed to make changes in the industry itself, turned to the theater houses and local governments, demanding stricter enforcement regarding keeping minors from viewing R-rated films without a parent or guardian. The industry was once again forced to make changes to its films or lose profits. Producers, though, having had a taste of things to come in the 1980's, seemed better prepared for the shift. They used the budgets ear-marked for special-effects or sex-scenes to pay for what they hoped would be acting and writing sufficient enough to keep viewers entertained. Changes in the rating-definitions also gave a wider birth for what film-makers could do and still avoid an R-rating. New categories were added, including PG-13 and NC-17. PG-13 is essentially an R-rated film with no nudity and slightly less blood and gore. A PG-13 film can often be just as violent as an R film, but lacks the blood to emphasize the violence. NC-17 is used for films that, while not pornographic in nature, are still violent and sexually titillating enough to not be deemed safe for anyone under the age of 17.
PG-13 seems like a perfectly reasonable solution. Critics and what I would refer to as "light-horror fans" point out that the films should be about the story and the scares, and not having the gross-out factor or the sexuality to rely upon should produce a higher quality of film. Instead, we have ended up with a crop of horror films that, being so concerned about getting a PG-13 rating, take what might be a frightening and interesting premise and removing its... well... balls. The films either try to be overly cerebral, which is tough to pull-off, and even when it is most of the audience won't appreciate it, or they rely heavily on "stings"; points in the film where the audience gets a visual and audio "boo!" or jolt. Too many stings in a horror film results in the audience growing bored with it.
The writers, directors, and producers who love horror and strive for the dreaded R-rating (or NC-17) are still making films. The film industry, however, is less willing to produce and provide budgets for these films, because their primary audience (boys 14 and older) will be unable to see them in theaters. The direct-to-DVD market, the vehicle of independent horror-film makers, has the stigma of being low-budget, and while the independents do occasionally make a great film, far more often budget constraints draw mediocre contributors (actors, directors, writers, effects) and produce mediocre films. This means fewer good horror films, which results in waning interest in the horror genre, and the slow choking-off of the horror-film industry.
Despite the issues with independent film-makers (minimal budgets leading to cut-rate acting, writing, effects, etc.), the only real solution I see is to support and even contribute to the production of independent horror-films. First of all, there is a greater likelihood that independent horror-film makers love horror-films and the craft of making horror-films. They are not as interested in money as they are in creating their film. Second, because money is secondary to the film itself, they are less concerned about how the film will be rated. Most independent horror films are not even seen by the rating-board. Wes Craven and John Carpenter no doubt love horror-films as much as any independent film-maker, having started as independents themselves. Now, though, they command huge budgets but are also beholden to the concerns of their investors who see backing a film as a way to increase their investment, not as supporting the art of film-making. Third, independent film-makers are grateful for any assistance they receive, whether it is a contribution of funds to their production or volunteering to hold up a light while the film is being made. The opportunities to actually contribute abound.
When independent film-makers are able to produce good, successful films, the major production-houses will wake-up again to why horror films make money, and cut the tethers on therirown film-makers (or higher the independents). The only way to save the craft of the horror genre is to support the craft-makers.