I much preferred the separation of Search and Stealth in old IE games. It doesn't make any sense that one would have to hide to find hidden objects. Doing so looks silly.
That many posters have argued that hidden items don't even matter is a problem in and of itself. Why should the answer to a poorly designed aspect of the game be completely ignoring that part of the experience? Yeah, you probably don't need another "fine dagger" to go with the 5 you already have sitting in your stash. Maybe a fix would be to make hidden items matter a bit more. At least then they'd be worth the pain in the ass of crawling around finding them.