Of course horror is suppose to have a level of violence and gore, but sometimes newer movies go overboard and believe the gore factor equates to scary or make up for weak storytelling. Sure, some of the iconic horror contain gore, but most of it is not as excessive as current horror. The way they use it more for shock while the situation and/or antagonist contribute to the scariness. Everything has a purpose and balance.
For example, the original Texas Chainsaw Massacre had plenty of uncomfortable, gory moments. Whenever Leatherface successfully captured his victims, you knew things weren't going to be pretty. But the fear didn't lie within the horrific gory imagery, it was solely him and his behavior or the thought of his potential actions. For a current example, American Mary decides to leave its gory imagery off camera and allow audiences to use their imagination.
To show you how moviemakers are doing it wrong, check out the new Evil Dead. Because technology and props have upgraded since the original, the movie relies on severed parts, blood, and gore to scare its viewers. Every characters' gory actions toward each other and themselves are taken to the extreme. Hostel is another movie that depends on gore to get its scariness across. Nearly every torture scene is on camera and the consequences are amped up.
I believe that sadly the choice to add more and more blood have manipulated newer or younger fans that excessive gore is required in horror movies and that it translates to scary. You don't need an overwhelming amount of blood, guts, and whatnot to make a successful horror movie. You don't even need to make gore unsettling either. Look at The Strangers or Saw. These movies depended on atmosphere and quick editing to get its mood across.