For all we know, it's not that unlikely that they were right, or at least that cuddling isn't strictly better than not cuddling (either it doesn't make a difference, or each has consequences we would consider as beneficial and consequences we would consider harmful).

No, actually, we have substantial evidence now that babies need skin-to-skin contact to thrive. Because the maternal instinct is very strong in this direction (for a good reason) the data about what happens to babies who are not cuddled mostly comes from orphanages. It's a very sad answer.