John, sounds like it's been many years since you looked underwater. During that time digital has had a greater impact on UW photography than land photography.
- unlimited images per dive
- instant review of results to correct flash exposure, technique, etc.
- no, digital is not cheap (although i've seen excellent macro shots from small cameras), but housings weren't cheap for film cameras either. it's quality time diving that is expensive by comparison
digital drastically reduces the learning curve for UW photography and has resulted in an enormous improvement in the quality and variety of photographs
believe it or not, great photographers used to take great wildlife photos with Kodachrome - it just took months of time and thousands of rolls of film, as it did underwater
yes, viewfinders do work underwater, and yes, the bigger the better