What in the world is going on.....

Yeah, I know his 4th dimention. He still plays great but what he plays these days doesn't resonate with me.
You are right about Segovia. Generally, classical guitarists don't position their right hand in a natural way, unlike flamenco and jazz guitarists. They also elevate their left foot, strange as it is.

Kclone, when I listen to my system which is not very high end, my expectations are quite high. When I listen to youtube or cd on computer drive thru Grado headphones the expectations are low, so whatever sounds okay makes me happy. Any cd I have sounds incomparably better in my system than on computer.
Cabling of course is always very important, be it good or bad recording.
High end system is more difficult to make sound right than lower end one, that's for sure.

Older guitarists "tend" to develop wrist arthritis? Some might, but otherwise that is utter bullcrap, and to compare Clapton and Beck to Santana who, although arguably soulful, has never really had the chops of most great guitar players (saw his last show touring with McLaughlin in the 70s and it was sort of embarrassing to hear Carlos noodling along somehow)…Regardless of what people think of Clapton (listen to him playing stuff by his blues heroes and note how he utterly nails it on acoustics or fat Gibsons…amazing), he hasn’t lost anything except the desire to tour, and Jeff Beck is in a class of his own always touring and releasing new stuff, and absolutely blowing minds with his crazy inventive chops every damn night. I’ve been a pro guitar player since 1967…no arthritis and I play every day, and I’ve worked as a live sound tech/mixer for decades and in recent years have seen Larry Carlton play like he was 23, worked with the late John Renbourn who could give a clinic on acoustic technique in his 70s, Sonny Landreth, David Lindley, Robbin Ford (saw him a few months ago…amazing), John Scofield is a personal favorite, Bill Frisell is a genius, Stanley Clarke last year was astonishing…get out and see these guys before judging the geezers because you may find out where the mojo resides.

Wolf,
Different people have different aging.
My colleague is gigging musician in his 64 and his classical guitar skills are limited compared to decade ago. 
Steve Howe, all of a sudden, when he was 68 couldn't play a single note clean as he used to prior...

Inna,

In modern school of classical guitar the position of right wrist is free just like in jazz guitar. Check videos of Anna Vidovic or Emanuel Baruecco (who actually trained Anna). Also the clear genius of modern classical guitar is Rolan Dyens. He also keeps his right wrist free. Elevation of neck is to make right wrist perpendicular to the strings as one of the reasons.

Hey, anyways, thanks everyone for not comparing above mentioned musicians by wolf_ to Paul Simon after all.

Czarivey, I'll try Rolan, though I am not much into classical guitar. However, when someone plays real well I don't care about the style per se. Malmsteen has a great talent but he screwed up most of it. Some of his earlier neo-classical takes are very impressive.