D&D characters gain abilities in two ways: by choice and by chance.
In modern D&D, powers and abilities (feats, spells, etc) are generally chosen by the player, out of an ever-increasing set of sourcebooks.
In older D&D, the main special powers were spells, and they tended to be given out randomly or at the DM’s discretion.
Is one approach better than the other? Well, it seems to me that they reward different types of players. I’m tempted to raise the false dichotomy of “Roleplay vs Roll-play”, but I’ll avoid needless use of loaded terms and — nah, skip it! I WILL talk about roleplayers vs. roll-players. I think I may be trolling, guys! Am I doing it right?
In this context, I’ll define role-players as people who primarily choose their powers to support a specific character concept: a dual-wielding dark elf, for instance.
Roll-players are people who primarily choose their powers to make themselves effective in battle: a 3e Batman wizard, for instance.
Let’s see what Batman and Drizzt players do in modern D&D, where players can choose any ability they want out of the infinite universe of character options. The role-players are able to build their concept perfectly. Roll-players, though, quickly learn the “best” combinations and never choose anything else. They actually cheat themselves out of a wide range of character experiences this way.
On the other hand, what if we used a system where powers were assigned randomly, or discovered like treasure? Role-players would be frustrated when their dark elf ranger started accumulating longbow feats, so they couldn’t play the character they wanted to play. Roll-players, though, would be forced to optimize their character within arbitrary constraints, and would get the fun of facing different sets of tactical decisions with every character.
Modern D&D is a pretty crunchy, tactical RPG. Its totally non-random character creation, though, is better for actor-type players than tactical-type players.
In my Mazes and Monsters rules, by the way, I use a hybrid system. Characters choose special abilities from randomly-selected subsets of the available powers. 5e suggestion, guys! Might be a good way to go.