Campaign Design and the Free Love Era

I've identified two essential campaign design philosophies during my time with roleplaying games, specifically with regard to the dangers and rewards present in the world. The first is a tailored approach and the one that seems to be supported in the majority of roleplaying game rules and source books. The world is built to fit around the characters and the mantra is to give the players what they want. While there are still challenges, the design approach is to hyper balance everything and reasonably insure player characters never really go places where there things are lethal. The beasts they can't handle at their power level are far away. It goes to follow that magic item rewards are all useful, sell-able or seldom dangerous.

The other philosophy, and the one I personally subscribe to, is that the world is a dangerous place. While the campaign is still focused on a group of heroes, things are not tailored. Characters can wake up at the local inn and pretty much go anywhere. They can stick their noses in where it doesn't belong. They can interrupt local thieves guild business and get whacked for it just the same as if they were messing in mafia business. If I mention the lair of an ancient red dragon that doesn't mean they should go there, but it does mean they can. If they do, they suffer the consequences just like the sheep in the field. If by some strange circumstance they win against the red dragon, then the dragon's trove is what it is. Yes, some items are going to be useful, but some of them will most certainly be tainted with evil or might even be dangerous in and of themselves. Having some of these items might be just as dangerous or might lead to even more danger, Lord of the Rings style. The world just isn't a nice place. That isn't to say that characters can't live and breathe where there are handmade doilies on all the furniture, tea and crumpets for breakfast and general nice, nice all around. They certainly can. However, to presume the dangers are balanced like the tires on a car is ludicrous to me.

I've often wondered where the former philosophy came from. This is pretty much where I leave the question open. Still, I've often found myself reading along in the various rules and play advice and seen the former philosophy slurk forth like pablum from a baby's mouth. I usually cry inwardly "what a bunch of 'me generation' bullshit" (embracing my inner George Carlin) then move on, which leads me to wonder if the "give the players what they want" mantra and the former design philosophy doesn't ultimately rest on the alter of the American free love era?

P.S. In that same vein, has Dragonlance made wimps of us all? LOL