There's a certain sort of person who feels that the platonic ideal of Unix is somewhere around Research Unix V7 and it's almost all been downhill since then (perhaps with the exception of further Research Unixes and then Plan 9, although very few people got their hands on any of them). For all that I like Unix and started using it long ago when it was simpler (although not as far back as V7), I reject this view and think it's completely mistaken.
V7 Unix was simple but it was also limited, both in its implementation (which often took shortcuts ( also , also , also ) and in its overall features ( such as short filenames ). Obviously V7 didn't have networking, but even things that most people think of as perfectly reasonable and good Unix features like '#!' support for shell scripts in the kernel and processes being in multiple groups at once . That V7 was a simple and limited system meant that its choices were to grow to meet people's quite reasonable needs or to fall out of use.
(Some of these needs were for features and some of them were for performance. The original V7 filesystem was quite simple but also suffered from performance issues, ones that often got worse over time.)
I'll agree that the path that the growth of Unix has taken since V7 is not necessarily ideal; we can all point to various things about modern Unixes that we don't like. Any particular flaws came about partly because people don't necessarily make ideal decisions and partly because we haven't necessarily had perfect understandings of the problems when people had to do something, and then once they'd done something they were constrained by backward compatibility.
(In some ways Plan 9 represents 'Unix without the constraint of backward compatibility', and while I think there are a variety of reasons that it failed to catch on in the world, that lack of compatibility is one of them. Even if you had access to Plan 9, you had to be fairly dedicated to do your work in a Plan 9 environment (and that was before the web made it worse).)
PS: It's my view that the people who are pushing various Unixes forward aren't incompetent, stupid, or foolish. They're rational and talented people who are doing their best in the circumstances that they find themselves. If you want to throw stones, don't throw them at the people, throw them at the overall environment that constrains and shapes how everything in this world is pushed to evolve. Unix is far from the only thing shaped in potentially undesirable ways by these forces; consider, for example, C++.
(It's also clear that a lot of people involved in the historical evolution of BSD and other Unixes were really quite smart, even if you don't like, for example, the BSD sockets API.)