Earlier quoted context omitted.
They are functionally equivalent for the player. The problem with player hosted servers is that it was very hard to get a fair and balanced competitive match, where now it's extremely common with matchmaking on servers hosted by the game company.
Back then at least you could do something about it. Now if there's an obvious cheater you just kinda sit there and take your L, and ask people to make reports.
Edit to add: I'm not disputing that kernel-level anticheat is bad; I agree that it is. I don't think it helps to try and hearken back to a golden age of PC gaming that didn't really exist. Maybe it was easier for server admins to manage because player populations were smaller back then, but that's about all that would have made things "better."