I remember the 'old school' and there were plenty of poor quality games; its just that very few of these have survived 20 years or more to be shopped around as examples of the past.
"If all our airplanes keep getting japanese bullets in the wings and tail, don't put more armor there--that's were we don't need it. Put it where the airplanes that don't survive get shot." - Abraham Wald
Great comment (and quote!) -- totally agreed. But my having used a mediocre example doesn't counter the gist, that constraints can and do breed elegance. (shrug)
I do agree with your conclusion that constraints can lead to elegance. I just think that your point about old video games wasn't a good argument in favor of it.
I also think there is a better point to be made about what sorts of constraints produce elegance and which ones are just frustrating and produce hacky workarounds. I think in order to make that point, someone would have to do some engineering history research and some insightful thought to see how an engineer's mindset and a projects constraints interact to produce elegance. I suspect the development of those video games could be a fruitful place to look for that history.