Being invaded and totally powerless to fight back is the very definition of horror.
CA is doing it right.
No, it sounds like they're doing it
wrong.
Being totally powerless to fight back in real life is scary because, once you're dead, you stay dead.
In a video game, though, once you die, you just hit the reload button and you're back to life again. At that point, facing an opponent that can insta-kill you just gets annoying, not scary.
For a good example, play through the section of Arx Fatalis where you get chased by the unkillable monster.
And that is precisely, why a real horror game cannot ever be made.
Crippled alternative is, not to allow the save function all together. Which was proven with 99% accuracy, that it is not what majority want. So, designers need to look for other alternatives.
The best alternative is distraction, i.e., you allow some side activities, like shooting respawning robots/aliens/blabla from time to time and have the story developed a bit faster. One of the greatest gaming gems is exactly like that - System Shock 2. I wouldn't mind if Alien: Isolation moved that way. In fact, I would be overjoyed.
I just recently found out about this game and, what strikes me, are some similarities with SS2.
But maybe it is just me being nostalgic.
EDIT:
The obvious difference is, that in SS2, the "respawning-enemies-mode" is used to simulate the constant threat, while in Alien: Isolation, it is an alien. You cannot cheat the "respawn-mode" in SS2 (aside from stealth), and so you cannot kill Alien in A:I.
At the same time, in SS2 you were allowed to kill the waves of respawns, once you fucked up with stealth (and you have plenty of choices - amazing how they fit it there, like chemistry, psi, weapons etc. to react to the situation).
Then, from time to time, you had staged bosses in SS2(I, personally, don't like it).
In, Alien:I, you will likely have an Alien, that can be avoided (substitution for "respawn-mode"), and once you are discovered, you will hopefully have some alternative mechanics,- escaping while slowing the Alien down, for example.
And hopefully, some degree of other threats that will be driven by the story.
Fuck, I know it won't happen...