It's not archaic, it's where the term derived from. As people seemed to be wondering what a "B" movie is, I gave them the answer.
Evil Dead was most definately a "B" movie. Both low budget and horror.
However, even now, while Sci-Fi and Fantasy is currently A list material (and is often cast with A list talent) Horror is still pretty B movie. Whilst kids films and Superheroes and fantasy stuff is often £100m-$200m+, horror rarely gets close to that kind of figure. Not only that, but when those amounts are spent, it's so watered down that it pleases neither mainstream nor horror fans. The recent Wolfman film springs to mind. Of course, the horror film doesn't lend itself to the marketing/merchandising department, which is part of the problem for Hollywood. Just look at Van Helsing.
One of the reasons that horror movies are so prolific is because they're cheap and there's a devoted following out there. To the extent that the recent remakes of horror royalty, Texas Chainsaw Massacre, A Nightmare On Elm Street, Halloween and Friday The 13th, all made a profit. Hell, even the much derided Black Christmas and (even worse) Prom Night remake took more than twice what it cost to make.
Now take a look at the difference in casts. The horror casts are either unknowns or teen tv totty, looking to make the jump to movies. Unknowns and/or up and coming talent, especially female. Classic "B" movie casting. When A list talent is involved, it's still usually low budget or, at most, around the average cost of an average Hollywood movie. The Sixth Sense is the biggest budgeted horror film I can think of with A list talent attatched and that cost $60m which, at the time, I think was around the average cost of a Hollywood film and that took over $600m worldwide. And that's when $600m was a lot.