Can't zoom as well? That has nothing to do w/the format and everything to do w/the camrea. Can't handle low light very well? Again, that depends on the camera not the format. And the difference between video shot using a DV camera and video shot using an analog camera is very noticable on any TV.
As I said, and you agree, these are very camera specific. However if you look at the cameras on sale you notice some trends.
1) All analog camcorders with any significant sales have a minimum of 16x optical zoom. Most have 20x or higher. Very, very few digital camcorders that you will see in the stores have above 10x optical zoom. So if you want to do things like record the child on stage, or at graduation, etc, the vast majority of analog camcorders will zoom twice as close or more than the vast majority of digital camcorders. Yes the format doesn't determine this, but the cost does. In an attempt to get digital camcorders cost down, they skimp on the lens. So indirectly the format causes the lower quality lens. And yes you can add a $100 lens to get you that 20x zoom for a digital camcorder. But when he is already looking at the bottom of the barrel (to afford it), there is no room for a $100 lens.
2) The digital sensors don't operate well at low light. Plain and simple. Compare a $400 digital camcorder to a $400 analog camcorder at low light levels and you will see a night and day difference (if you can see anything at all on the digital camcorder). Yes this is camcorder specific, but in an attempt to keep costs down, the low end digital camcorders use cheap parts that aren't very sensitive to light. Yes you can buy a $600+ digital camcorder to fix this, but this thread is about ones under $500.
3) Decent ($300-$400) S-VHS camcorders quality compared to the bottom of the barrel (under $500) digital quality has always been ranked higher in every report I've ever read. So yes the difference is noticible on any TV - the digital is worse.
You linked Cnet (which sadly doesn't review many analog camcorders), so lets look at the editors recommendations. Not a single one on the top ten list qualify for this thread: under $500.