The more you show people, the harder they are to shock. The Excorcist had people running out and barfing in the asles. If they made that movie now, people would laugh and demand their money back. I think the solution is showing horror movies to younger audiences. Little kids are afraid of everything.
I think they have already tried that with most horror movies being brought down to a lame pg-13 rating, for example, "The Grudge" I think that movie companies need to make the films more original. That or at least bring back the films to the R rating. I admit there are few horror films that are rated pg 13 that are good like "The Ring" but people want to see a horror movie because they want to see things that wouldnt be shown in a pg 13 movie.
horror in each generation is relative. The exorcist was scary due to the situation and innocence of the victim. the only recent horror film that got me was Pulse. I think The signal will be good also. Pluse zombie movies still freak me out.
For the past few years, horror films have nausea rather than scares, but lately that's been starting to turn around. Check out films like The Descent, The Host, 28 Weeks Later, 1408, and The Orphanage. Some of the best horror films I've ever seen were made very recently.
Horror died along with disco, I haven't been scared of any of these crappy excuses for horror for nearly thirty years. But as long as 13 year old kids are going to see over rated "horror" movies so they can look "HARD CORE" to there friends horror movies will continue to be made.