BS”D
Judging someone by a label is exactly what turns people off instead of encouraging them to explore other paths within Torah.
However, the issue at hand here could be the difference between real Modern Orthodox (R’ YB Soloveichik ZL, Yeshiva University etc) and sort of a flexible pattern of observance that was really more common years ago and is indeed dying out. At the time when this pattern was prevalent, it was socially and financially very difficult to be fully Torah observant and this was the best many could do – it was very commendable at the time.
Children from such “flexible” homes either take on a more standardized level of observance or indeed drift away. (YCT is a different issue altogether and is really a very small segment of the MO world). There are children of such “flexible” homes of the 1960’s who now wear shtreimlach, or learn in Lakewood full time, or are part of the “charedi” community in EY etc. (Of course, others are involved with the “conservative” movement or secular).
Real Modern Orthodox nowadays is almost indistinguishable from the “yeshiva world” on the outside except for the emphasis on professional secular education. While there are some points of debate in terms of hashkafah especially for the non-Zionists among us, the level of learning among serious YU beis medrash talmidim was quite high even in the mid-1980’s.