Yeah, looking at that I'd say that's definitely what it is - you can see the way that area just looks so much better - more natural shapes, proper beaches rather than chunks of sand, winding rivers, and so on.
I think that in 1.8 the terrain generation was totally redone, meaning that the new areas that are now being generated are using a completely different system.
Is it just Skyrim that has taken people away from Minecraft? Didn't it become desolate before that? Not been on a while myself so wouldn't know though. Last thing I did was tidy up some of the bottom of my hole but not sure I'll end up using that now. I'm sure that'll make Ant happy ;) Maybe after Skyrim I'll finish it off.
Also, who (if anyone) is playing on Teh Mine recently?
Is there any chance of getting all mobs on, maybe with a plugin that only lets them spawn in the "wilderness" (i.e. natural caves and non built areas), if there's such a thing.