Old school...terror? I'm not sure I follow. What's terrifying about older games?
Lots of monsters, like the Rot Grub, for example, just off the top of my head from the
Monster Manual (several examples from Russ Nicholson's amazing
Fiend Folio art also leap to mind). Or that image of the character trapped in the room filling with water and the skeleton rising behind him from the DMG. Or the core concept of getting lost in the dungeon and never seeing the light of day again*, which was a major threat in early play according to a lot of the original players. And as you can see in the random dungeon generation tables.
What was the point of this rule? And people say I'm wrong when I say TSR encourage that "DM vs players" thing...
The poison thing? It's one of those things which only makes sense in context, or if you get into the right headspace and think it through. If you were a 70s D&D player and/or have read a bunch of articles and zines from then, you'll know that the idea of player-wielded poisons was an ongoing discussion and recurring attempt at powergaming. Since poison from monsters normally killed the target on a failed save regardless of hit points, it was an obvious thing for players to try to get and use.
Jim Ward had an article from Dragon #13 (and reprinted in
Best of The Dragon vol 1, where I first read it as a kid), Notes from a Semi-Successful D&D Player in which he wrote:
Then there is the poison on the dagger trick, which every judge is always trying to stop. I have been told that poisons evaporate, poisons exposed to the air lose their effectiveness, or the most used of all, in your area there is no poison strong enough to kill the things you want. I suggest to all you players and especially the magic users that can use only daggers, that any amount of money and effort spent in the procuring of a really effective poison is worth it. I spent over 90,000 gold and haven't regretted a copper piece of it.
So in this context, you can see that Gary's advice in the DMG was an attempt to slow the proliferation of poison use by not encouraging it, while assuming that OF COURSE smart or experienced players will wind up trying to use it. So he gives the DM rules for it with that expectation.
Similar with his advice about sharing spells in the DMG, where he gives all these instructions about how NPCs will be incredibly stingy and demand exorbitant prices, but that "superior" players will naturally cooperate and share spells, although the DM shouldn't encourage or suggest it. Once again "Gygaxian Skilled Play" in action.
------
*Fun side tangent: In 1987 Games Workshop published a random-tile-based dungeon crawl board game called
DungeonQuest, which was a remake of a 1985 Swedish game from Alga AB called
Drakborgen. One of the core mechanics of this game is the turn tracker, showing the sun dawning, climbing through the sky, and setting. If you're not out of the dungeon by sunset you're lost forever and die.

I've loved the art and aesthetics of this game since I first encountered it in the 80s, and I like how it makes that "get lost forever" aspect of old-school dungeon crawling part of the central conceit.