It was categorically, undeniably better--that's where the nostalgia is coming from.
There are lots of reasons why this happened (and those are interesting questions.) But simply denying that it was better doesn't seem particularly reasonable to me.
The Internet of today is barely recognizable. The very thing that made it sustainable (commercialization) is also what led to its demise.
There are still sites (like HN!) that give me a taste of the old world. But they are few and far between.
Constraints tend to make you enjoy something more. I agree that a lot of the things that annoy me today weren't present back then. But a lot of other things that I take for granted these days also weren't present back then.
Was it better? No, I don't think so.