Do we? Or is that just nostalgia. I'm in the younger generation but as a kid watching Star Wars, it didn't care. Now watching it I see janky models on sticks and wires and a puppet for yoda barely moving his arms.
I think it's the suspension of disbelief. Star Wars at its time was phenomenal for its VFX and SFX, but CGI in movies nowadays is saturated, so it feels less impactful to us
I don't think there's anything wrong with how he looks but the subtle over-fluidity of his movement. It's especially bad in the first shot when he's just swaying around most unnaturally. He's completely out of focus so there's nothing the rendering is doing wrong but the motion immediately alerts the brain that this isn't real.
We buy puppet Yoda as being real (or at least suspend disbelief) in a way we simply can't do with CGI Yoda.