It just shows how clueless TPTB have always been. The coveted "kids" in the audience have always loved characters of all ages, and adored watching Alice Horton, Edward and Lila Quartermaine, Aunt Liz Matthews, Nancy Hughes, Bert Bauer, etc. Just because a viewer was 15 years old did NOT mean that she only wanted to watch horny, half-naked teenagers running around.
Agnes Nixon did retain some control over AMC at that time, so I imagine the preservation of the show's core, veteran characters was thanks, at least in part, to her influence. Ditto Bill Bell at Y&R, who never stopped writing for the likes of Katherine Chancellor.
We DID see Steve Hardy on GH in the 1980s, but more as a supporting character rather than a lead.