I didn't think the OP was too long, I read it all and agree wholeheartedly.
I think you hit the nail on the head about the people who like Resident Evil, Silent Hill, etc. They're good games, but they're not able to give the player (well, me, at least) the pure terror that Amnesia can.
The fun point of scary games and action games is in the adrenalin rush. The people who play the zombie shooter type "horror" games prefer the "fight" part of the fight-or-flight rush you get with adrenalin. Amnesia gives you pure flight, since you know you can't fight back. It's far more realistic.
What is implied but not seen can definitely be a crucial part of the terror. The
I also agree about insanity. It didn't really feel like there was much punishment for going insane (besides the creepy portraits, monster-spotting-you-more-easily etc.) I know it's been addressed a lot, but it would definitely be more terrifying if insanity made you doubt what was real and what was hallucinatory.