Persona 3/4 didn't dumb down the combat. They're pretty much completely identical to DDS and Nocturne's combat system.
Persona 1 and 2 weren't hard so much as they were clunky. Arcana Card acquisition could get REALLY annoying and tedious. Nocturne has a similar system, but you got immediate rewards for playing nice with the demons.
Dating sim was half assed, I guess. More character development overall though.
Yeah the battle system is essentially cloned in all recent SMT & Persona games, but in general, I don't really like it. Content wise, I just happened to like Nocturne and DDS better. P3 & 4 were the first in the Persona series to use the new system is all.
I think the story was way better in Persona 2, or at least more epic in scale. P3 & 4 were just kind of meh story wise. It felt like a lot more was going on in Persona 2, considering it branches 2 games/realities. Of course, that may not make it a fair comparison to 2 single game entries.
I'm not so sure about more character development, just more generic interactions and responses a la dating sim. I think what really bugged me about it was maximizing interactions and dealing with a time table. I don't like time limits in games, especially RPGs.