The reason we think that the broken up categories work better is because most people fall into certain category. The average gamer doesnt have every game console out there thus many of the topics in the "General Gaming Discussions" are not interesting. If one has only a PS3, that individual is not interested in sorting through a bunch of PS2, PSP, NeoGeo threads to find something interesting. With the new setup, if you're a PS3 gamer, you go straight into the PS3 section and you are much more likely to find a topic that will interest you.
We hate to categorize people, but we humans tend to have certain interests. For example lets take radio, think about it, there are separate stations that play classical, pop, country, jazz, rap, oldies, love songs, polka, whatever...how many of you listen to a station that plays ALL of those genres on one station? Probably none. (Thus the reason a station like this doesn't exist
)
As for the clutter that you mentioned, my favorite feature is the "New Posts" link at the top. I always use that link because at a click of the button it shows all threads that were updated since my last visit, so I never miss anything, neither do I need to go through every category to keep up.
My 2 cents