Aesthetically the older architecture is more exciting mostly because we don't build it anymore. Modernism hasn't failed by definition because we essentially build zero classic architecture anymore, still to this day.
But let's take a few things into consideration:
1) All grand old projects back in the day revolved around ornate, classical styles. If everything is designed around that standard, the generation that considered minimalist modernist designs was looking for something new. To them it was a breath of fresh air.
2) While decadent on the facade, was the old Penn Station as functional as the new one? I have a feeling - despite our architectural differences - the new Penn Station has served it's purpose well. The old structure was certainly showing it's age in the 1960's, probably more so than the current structure. Photos I saw from before the demolition show a rickety roofing, an aged and dingy set of glass panels... It just looks like the cost to fix it would be prohibitive, plus the fact that the new Penn Station has efficient use of everything else above.
There are reasons people wanted to move forward and create a modern look. This looks old and tired. The exposed steel wasn't particularly exciting, it was just a functional classical style.
There's nothing wrong per se, but it is certainly wasted space compared with the new Penn Station.
The new Penn Station has more stuff, the older Penn Station was aged and wasted space. Sure, it may have looked better in a subjective sense, but not everyone agrees. I have had a huge 180 in my view of modernism, I bought into the "only classical is worth saving" mentality 10 years ago. Today I love modernism and understand why it became the standard. People were tired of stuffy, stodgy, old world architecture. The new, minimalist, fresh approach was necessary and good.