EDIT: Argh, my first paragraph was eaten :( Ok, let's retype this.
Dear Mr. Plott,
the need for lives and continues stems from the old arcade days, where it made sense to have people inserting quarter after quarter to buy continues, especially in never ending games like gauntlet. On the PC, that mechanic just doesn't make sense anymore.
Also, since games aren't necessarily geared towards kids these days and adults suffer from a dramatic lack of freetime, it's necessary to tone down the ridiculous difficulty. Who would bother these days with RPGS that lacked automapping (which was probably a technology restriction) like the old bard's tales?
Evolution in gaming can certainly be seen in board games and computer games have also progressed, not only technology wise with better graphics, but also with concepts. I think Ron Gilbert said that they didn't put dead ends into maniac mansion out of malice, but simply because they didn't know better.
All the best,