To be sure, nostalgia plays a huge part in the way I've viewed both 3e and 4e. I "grew up" with 1st and 2nd Edition. My first, influential experiences with the game took place with those rulesets (sorry Mike, I never used the red book!). By the time 3rd Edition came along, I had largely give up gaming for other pursuits and I looked at the new (3e) ruleset with both interest and detached bemusement when it was released. Indeed, I didn't actually purchase a new 3e Players Handbook for months; odd behavior for a once-huge fan of the game.
The newest version of the game is very balanced. Let's face it, 1e was totally unbalanced (sometimes purposefully) but in a way, for all the frustrations it caused (dead 1st-level magic-user anyone?) it was also part of the experience.
There was no sense of entitlement on the part of the players, no automatic assumption that every encounter will be fair or that every item of treasure will even out. Sometimes you fled because survival required it. Sometimes a rod of lordly might fell into your lap (until the DM later found a way to destroy it). Sometimes 1st-level characters died through no fault of the player, but you laughed or groaned and rolled up another one (a process that rarely took longer than 15 minutes). That very uncertainty, that very sense of having no idea what would come next, it was half the fun.
I look at the newer editions much in the way I look at the newer Star Wars movies. They have all the required elements and a lot of cool things—and I've warmed up to them tremendously after repeated exposure—but they simply don't have the "soul" of the first three movies in my book. I've asked myself if that's really because I was a teenager when the first movies came out. Star Wars was new at that time, there was nothing like it around. Special effects movies weren't a dime a dozen, with frantic Transformers trailers blaring on one's TV and all. I think the only "space movie" I saw before Star Wars in the theater was 2001: A Space Odyssey, so when that star destroyer first flew overhead in the opening scene of A New Hope I was hooked on sight. By the time the new movies came out, they had to compete with a pack of effects-ladden films that had been released over the past decade. I was older, more jaded. The original Star Wars rocked me because it was a great movie, but it also had no competition. Likewise, 1st Edition.
I think that's a good description as to the effect of nostalgia on my playing preferences. I still would like to see a less rule-heavy, less combat-heavy version when 5th Edition emerges (which I hope doesn't happen until 2015 or so), and acknowledging my nostalgic feelings doesn’t change these impressions. But to ignore nostalgia's impact would be wrong too.
I frankly don't know if any future edition will ever bring back that old magic (no pun intended). Playing older editions is fun, but I'm experienced enough to see the chinks in their armor. The newer editions inspire more power-building and meta-gaming for my taste. What to do? I guess there's really nothing to do, except gather a good group of friends and simply try to have fun without thinking too hard about it. In the end, that's good enough.