This. Its not that the original RE or SH games or anything else was "scary" just because zombies and jump scares and weird creepy things and places. What set most people on edge was the difficulty of the game in terms of just staying alive. But this was achieved almost entirely because of shitty controls that made you panicky and reacting badly would mean death, meanwhile the limited resources meant you couldnt afford to screw up that often or again game over.
But it was never the games themselves that made them that way, it was the control and lack of resources. Take something like original RE and give you unlimited supplies pissed at your face and make the controls far better (more responsive, more accurate, etc) and suddenly theres far less stress on the player which means less tension which means the horror feels far less meaningful. You add in just the simple ability to fight back effectively, and suddenly its no longer horror, its just a basic survival game or some run and gun fiasco
The real trick to horror games, is not to add crazy supernatural jump scares or creepy old people shambling at you, or tight hallways you have to run around in circles in. Its to limit the players ability to survive, to make the simple act of "not dying" a challenge, and punish them for fucking up and wasting resources, making them more tense, making them more likely to fuck up again, making death all the more certain.. ya know, how someone in a REAL horror situation might react, then when the cheesy scare bits come you're already tense as fuck and twitchy
You know what DOESNT make a good "scary guy" to fight? When hes invincible and no amount of damage will do anything more than stun him for half a second, and you're instead meant to just run away constantly. What makes him scary is when you have to deal with him, you have to beat him, but screwing up shots or traps or w/e else just makes it harder and harder to deal with him to where hes more and more likely to kill you, so every error you make leads to tension which leads to more errors which leads to death.. but you also cant have the controls SO punishing that you dont feel like its YOU thats fucking up and its just the game being a pissy little bitch, then that ends up just feeling frustrating and annoying. You have to strike a good balance between good controls and the ability to fuck up easily so if you start getting tense you fuck up, and the scary bits are all the more scary because you're always on edge while playing
Of course you can go to far in the opposite direction as well, giving the player NO ability to survive other than run away: see your outlasts and the like. Oh sure they've got atmosphere, but if you get caught or die or get jump scared, its not because you've necessarily fucked up things for awhile and gotten to a failure point, which has lead to increased tension the whole time.. nah its cause you didnt notice you could jump out of a window or something, then you realize your mistake and know exactly what to do, run away, just like you always do, its never ON YOU to fuck up less in order to survive the long haul, it ends up being the horror equivalent of QTE:TheGame for a few hours.
Most horror game devs dont seem to understand any of this though. They think the game should be responding to the player, not the character, when you put in actions. That if YOU want to aim at the head, wham, headshot, not "my tense character is trying to aim there but is scared as shit, which makes this way harder, so IM tense trying to handle that, then granny shows up behind me because I failed or maybe I hit far enough in the fight that she shows up and FUUUUCCCK i think I just peed myself because she startled me showing up." Instead they think super natural crazy shit going on is scary and you just need to add more and more and more of it, until you end up with that last boss thats just "hentai monster number 4039" which is so over the top unrealistic that its more funny than scary
Until devs realize all this shit, we wont be getting any decent horror games. Maybe some okay "visual novels" that are horror based, maybe. But actual games? Nope.