Dead Space, arguably one of the best Horror games ever made, was horribly held back by the engines it was made on and the workarounds they had to use. The remake was so much better from a technical standpoint, and is universally regarded as the best way to play it. So yeah, you're right.
Interesting. I'm playing dead space for the first time really now on RPCS3 and it's pretty clear how the space station is sectioned off into "levels." But aside from that, the biggest issue that I notice is how there aren't really any cutscenes, just those basic voice messages. I chalk this up to EA being greedy EA.