Modern cnc machining produces a much better product than the old machining methods could ever dream of producing. Tighter tolerances with much less variation from lot to lot. I can remember when S&W offered some really poor workmanship for sale in the 1970's. Not all was 'beer and skittles' in the old days.
Well, hopefully without hijacking this thread too much, I would like to refute a few of your assertions. I tend to get a bit defensive when folks think CNC machining is the greatest thing to come down the pike since sliced bread. I do know a little bit about CNC machining, I used to do CNC programming and milling back in the late 1980s.
There are several reasons why modern industry as a whole has gone over almost completely to CNC machining for mass production of products. One is precision, with some modern CNC equipment, tremendous precision is possible, right down to a few tenths of a thousandth of accuracy. And today one can go almost directly from 3D CAD models to machining parts on CNC equipment. And that highlights another reason why CNC is so effective. It is cheaper to make multiple parts on CNC equipment than it is machining them one at a time on conventional milling machines. And THAT is the main reason CNC dominates industry today, because it is cheaper to make parts that way.
As far as CNC equipment making a 'much better product' than the old machining methods, have you ever lifted the side plate off of a Colt or Smith and Wesson made long before CNC equipment existed? The precise interference fit between the frame and the sideplate was done with pattern making millers that existed long CNC equipment existed. As a matter of fact, some of that equipment was developed before the Civil War, which is what enabled the Springfield Armory to turn out 1000 muskets per day at the high point of production. Precise, hand operated pattern following milling equipment. Equipment that made parts so exact that no fitting was needed.
Here is the frame of a S&W Tip Up Model 1 1/2 made in 1873. All of the milling to hollow out the frame for the lockwork was done with manually operated pattern following equipment. The workpiece and a pattern were clamped onto the machine. The operator manually operated a pantograph which had a stylus that followed the contours of the pattern. The machine cut the pattern into the workpiece.
The side plate was contoured on pattern following equipment too. Once the side plate was pressed in place, it was hard to see where the joint was. That is how accurate the old pattern following equipment could be.
Let's look at the machining inside the frame of a Model 17-3, made in 1975 by the way. Pretty nice machining if I do say so myself. Lots of nice CNC generated tool paths. Nice surface finish, no burrs, feedrate looks about right for the type of finish needed. The fly in the ointment is, it doesn't matter! The floor of that entire cavity is a clearance cut. The only place where moving parts were bearing against the floor of the cavity is the rub mark made by the rebound slide near the bottom of the photo. All the other moving parts; hammer, trigger, cylinder stop, rotated on the slightly raised surfaces of the studs they were mounted on. They did not touch the frame at all.
Now let's look at the machining inside the frame of a Model 617-6. Other than the lock, what is the most important difference between the machining of the Model 17 and the Model 617? There are raised circular bosses machined into the floor of the cavity. These circular bosses take the place of the bosses on the studs of the older gun. Notice the studs on this gun are simple straight pins with no features machined onto them. Why was this done? To save money. It is cheaper to add a few lines of code to a CNC program to add a few features, than it is to machine complex shapes onto a pin. In either case the studs are pressed in place in the frame, but money is saved by producing the parts the second way.
And that, my friends, is the story of any successful business since time began. Look for ways to drive the cost out of producing a product. Smith and Wesson is no different than any other manufacturer today. Daniel Wesson was a typical penny pinching New Englander. He was continually driving his engineers to find cheaper ways to produce their products. S&W has always had a history of driving the cost out of the product. That's why they went from five screws to four screws and then to three screws. Drilling and tapping costs money, and screws are extra parts in the finished product. Just one simple example.
As a parting shot, here is a photo of the fit between the frame and crane of a brand new Model 686 I bought just a few months ago. The cylinder is completely locked in place, that is as far as the crane goes when it is closed. Does it affect the function of the gun? Not in the least. Does it look sloppy? I think so. Would that have gotten out the door in the pre-MIM parts, pre-CNC days? I doubt it.
Hope I haven't hijacked this thread too much.