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This all started when CDs became the medium of choice over LPs. LPs HAD to be mastered differently because a loud bass note or even a loud plosive would cause the needle to skip.
CD's allow mastering engineers to create louder masters. As they discovered that, the producers (the guys running the show) started telling the mastering engineers to "make it louder". At some point the peaks (the loud parts) started clipping, so they started using compression to keep the peaks from clipping. This started making the valleys (the quiet parts) louder. Thus, the difference between peak and valley is diminished; therefore, the music is not as dynamic.
The recording process itself hasn't changed much. The mastering techniques have.
There is a time and place for wall-of-guitar and noise. It's just as essential to musical emotion as a single violin or flute playing a quiet phrase in a classical piece. The "loudness wars" have nothing to do with music being good or bad.
There is a lot of good music--music that is played well, written well, and recorded well--that has been destroyed by a mastering process which has reduced the dynamics to nothing but loud.
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