AndyBuzz: Horror is always "Psychological", dude... I don't get all these distinctions of horror we get these days.
That's the only reason you don't get scared with old horror movies. If it was "physical" or whatever is the opposite you could bet it would still be scary.
I agree with horror being psychological, since fear is just an emotion, your mind is actually responding to the prediction of any given situation outcome that goes against your safe zone.
Though, I don´t agree that people doesn´t get scared with old horror movies (by old I guess movies like "The mist (original)" or along those lines?), actually among old horror movies are the pinnacles of horror, then came all the nonsense killing movies, that had no horror at all, you were just anticipating a disgusting feeling, rather than feeling nerve wrecking anxiety of what was about to happen.
To me, good horror is more about what you can´t see, than what you actually see, building up suspense and fear by the unknown ("The Thing"). But some movies just rely on mindless killing as a focus to get you afraid, but it becomes boring and disgusting and maybe when you loose all sensitivity towards that, maybe, not even disgusting. So I can´t speak for everyone but at least to me, "physical" means "boring, uninteresting and repetitive". But again it may be more something of a "beholder affinity" thing, maybe some people react more to "physical, visual things" and others react more with "insinuation and hinting". I´m not saying that if someones gets killed (maybe even brutally) it´s not horror, but it has to count so to speak, it has to add to the context, what I´m against is when it´s just "ok, let´s see how many are going to get an axe to their heads in the span of an hour....in your marks....go!....kinda thing), that´s totally wrong, makes you feel exhausted by the repetition of disgust, than, by the thrill of the suspense, and that, to me, is no horror.