I would have to disagree with the 'watering down' bit. Years ago in our Catholic church the priest was so far up on his pedestal the child abuse he perpetrated went unchecked. His power was staggering over his parishioners. He ruled by fear and that kept him safe to practise his abhorrent acts.
Nowadays we have a much more open set up. The handshake of peace between congregation is new. It is nice to touch the people around you. The priest feels comfortable letting his congregation participate in the mass. And his ever increasing attendances prove that we are also grateful with the methods he uses.
I don't see a gesture that the rest of the congregation enjoy as 'watering down.' I see it as a step in the right direction.