Spot on Creg ny Baa!! I keep quoting this statistic to the Powers that Be, and all I get in response is: "Everyone's going a lot faster nowadays".
However, as you say, in those days there were a lot more riders,  and the top boys are still lapping the slower riders at the start of the third lap. Overtaking still takes place, that';s the nature of racing. PLUS, here's a fact. If you have a poor practice, and qualify way below your normal speed, you will still have to do a lot of overtaking. This happened to Michael Russell in the Superbike Classic TT.
Should have qualified top 20, qualified 54th, then went on to go through the field, and was lying about 20th before he retired. How many overtaking manoeuvres had he made by then?
The whole idea of qualifying for the Classic TT is flawed, (or for ANY race round the Mountain course).
As has been stated, there was always the facility of providing a lower start number for a rider who was doing exceptionally well in practice.
Now riders have to try to QUALIFY, when they should be PRACTISING!

I haven't even mentioned on this posting the difficulties that arise for spectators who have absolutely no idea what's going on. Many many folk have said to me that they would much rather have the old system back. For the TT course it is imperative in my opinion.