Olden days it was done by looping tape combined with early drum machines. Buy some late 1980s remixes of some Pet Shop Boys stuff and you'll hear it's definitely manually put together! Before that, go no further than the famous Tom Moulton to see what he used to do for his remixes - http://www.djhistory.com/interviews/tom-moulton
I agree with you buy the way that whilst Technology has given us the ability to engineer great sounds, the quality is unfortunately lacking