Just downloaded the new classic installer and compared it to my setup file from 2012 and they are different. New installer is about 7MB bigger.

That's because more files are inside the installers now, for the new languages that are on GOG, like those sliding images for other games sold here. You can unpack it with innounp.

Gog uses Inno!?

Fortunately, yes.

IF you can call that fortunate. It explains alot, though.

What is wrong with it, and what would be better, and why?

Maybe it's just preference. I used it back like 10 years ago, and ended up feeling the need to develop my own, and since i've pretty much scrapped developing on windows i don't have anything, anymore. Though, i've considered trying to make a new one, lately, using GCC. I just read up on "crypters" as i was curious how they worked, and such an idea would be fun to make (not to encrypt malware, but just for the sake of writing software that runs an exe, and it would help with false positives on exe files, i imagine, which is becoming pandemic, and i'm sick of people asking me how to fix the problem). The same techniques (except the bit of running the EXE) would be usable for this purpose. I did it once with a single file, but automation should be possible.

And on the plus side, making something themselves, GOG could actually pull off something involving new advertisements. Optionally allow online connection simply for the purpose of downloading the latest "download now." Maybe even a simple script that first checks to see if the installer is the latest version. You could easily put a "offline install" in a checkbox or something so it doesn't bother to connect and uses stuff put into the installer, maybe even the screenshots of the game that's being installed to add to the hype.

Moreover, it could easily be made open source so that their customers only have to FTP in and change a small file to upload an update. They could have a single click choice to "install normally" or "install with gog galaxy" and thus save on space with the newer installers on gog's server side.

Yeah, I call it fortunate because it's the only installer that I can unpack without any problems, with its folders structure intact and the script easily readable.