I have been following this movement for 9 years, both in the sense of interest and in the sense of dedication. But it took the splitup to see the fault lines that had always been there. Here's my analysis.
In the first place, the OSR was a reaction against 30 years of D&D development. Technically you could care about other games and be OSR, but in practice D&D was the big kahuna, the starting point for so many people's experiences, the touchstone often returned to, the market-share leader to watch.
Starting in 2008 or so with the release of 4th edition, people started to chafe at it it. And then in a kind of dance of the veils, they stripped away the previous layers of development, questioning each edition back to the Original books.
Fourth Edition: Away with the carefully balanced tactical game with roleplaying cut scenes, the blurring of class abilities.
Third Edition: Away with the unified mechanic, the scaling treadmill, the bewildering character options and optimization, the rules that cover every circumstance in talmudic detail.
Second Edition: Away with even the tamest instances of all-class skill rolls, the slight tweaks to character kits and class specialization. (This was an easy veil to strip off, very lightweight.)
AD&D: Away with the late-era developments of plotlined modules, the crufty mechanics that nobody used anyway, the fancy spells and character classes.
Not everybody took that last step, but most of the "old school" took as role models either Original D&D or the Basic offshoot. But why? If game design is progress, why go backwards?
The different answers to this question, in hindsight, can reveal the eventual fractures in the movement.
- Because nostalgia. Some people (concentrated in places like Dragonsfoot, Grognardia, and Knights & Knaves) just wanted to experience, or re-experience, the old rules, the old adventure tropes and clichés. Where they had an intellectual position, it was cultural conservatism -- the wisdom of the ages may seem irrational, but there is probably a good reason for it, and we should really strive hard to find the hidden brightside of things like descending AC or racial level limits. That position always struck me as silly. We are talking about game rules that aren't even 50 years old and have never gone a single human generation without substantial and multiple revisions. It's like going all-out G. K. Chesterton in defense of the original box design for Corn Flakes.
- Because idiosyncrasy. Some people (most egregiously, Alexis of the Tao of D&D) wanted to strip the old mechanics back down to their roots in order to build their own layer of heartbreaker complication from the ground up. That impulse itself is very old-school, rooted in the hoary traditions of Arduin, Arms Law, and dozens of other bolt-ons. Implicitly, this: "Increasing simulationist complication and character options isn't a bad thing, but I'd rather just have them my way, thank you."
- Because edginess. Some people (for example Raggi, McKinney) realized that stripping away the history of D&D also meant rolling back the layers of accommodation to prevailing social tastes: squeamishness over Satanism in the 80's and 90's, egalitarianism in gender and otherwise, but most importantly the "nice" style of gaming in which characters started with a lot already invested and it was hard to get killed for good. This left room to embrace all kinds of pulp-magazine nastiness: rape, slaves, body horror, morally blurred characters, meaningless character death, "nega-dungeon" effects that wreck the whole campaign world.
- Because interaction. The most esoteric development, but also the one I find most appealing, was to realize that after stripping away all the conventions of play, you are left with a space beyond rules, traditions, and railroads. You are free to emphasize creative improvisation, interaction between GM and players, and to design situations and systems that make the most of this. Philotomy's Musings and Finch's Primer, for example, put this forth as a play aesthetic, but there are also those who have made it into a design aesthetic -- often known as the "artpunk" or "DIY" movement.
But while today's D&D has Interactionist DNA, it is not a fully interactionist game, and certainly the official adventure material looks staidly conventional when compared to artpunk's open play and creative flourishes. At its best the DIY movement has given us: Borgesian monsters posing problems that go beyond combat; weird magic systems with flavor and creative effects; adventures that map out strange societies and oddball challenges.
Can we really still call it "Old School" or is it more like a "Never-Was" school? Certainly if anyone back in the 80's was playing or writing like this, I never heard about them. As the antithesis of nostalgia, Interactionist gaming uses the blank space around the stripping-down of the World's Most Popular Role-Playing Game to fill with its own peculiar objectives and ideas. That's what I like the best; that's my banner, right there.