I believe I've seen on some documentaries that when Hank
senior first started to play what you call classic country, the older generation then thought it was the worst stuff they had ever heard.
I believe that you are confusing Hank with Hank Jr. The term "Country & Western" was coined in 1949 specifically because of the success of Hank Williams. Before that, music of rural whites was called "Hillbilly" music. (Likewise, the term "Rhythm and Blues" was coined that same year as, before that, Black music was called "Race" music.)
Hank Jr. started his career singing his father's music, when he started doing his own thing, it was quite upsetting to a number of people who just wanted to hear his father's songs. And, again, that argument doesn't work because there are plenty of people who are fans of 100+ years of "Country" music and draw the line in the sand for most of it somewhere in the mid 90s. There is a way to progress forward while respecting tradition and there are plenty of people out there doing just that and doing it well, however you won't hear it coming from mainstream Nashville.