Kids still do this.
I don't know why this idea persists. There have always been sets with custom pieces. My kids go crazy over the custom pieces because it sparks new ideas for their other builds. My kids know every custom piece from every set they've ever built and will describe them in great detail so we can search through the bin until we find it.
> The Lego spirit of ever combining and creating with same pieces over and over again is gone
For you, maybe. The kids are still doing this and having a great time.