There's an extremely common thought among game designers that survival horror games are based on disempowerment. I really don't know how this got to be a common theory, because it's wrong. It's wrong in the same way that "the sun rises" is wrong.
Balloons rise. Smoke rises. The sun does not do that. The sun only appears to rise because of our perspective.
The disempowerment thing is the same. It only appears to be founded on disempowerment because we're looking at it from the eyes of the player, and that's what it appears to be from that perspective.
But it's not.
Survival horror is, in the very first word, about survival. The primary challenge of the game is going to be about surviving, not about winning or shooting accurately or gaining levels. It's a different focus, although often not a very tight focus.
In order to make the game about survival, "disempowerment" is required. More accurately, "game balance that makes the challenge of surviving actually challenging" is required.
Thinking of it as disempowerment is probably not accurate, because disempowerment implies some kind of absolute norm of power that you're undercutting. That's not really accurate: it's just game balancing, and surviving has more subdued encounters. Typically, attrition is a much more powerful and effective tool to make survival feel like survival. Even that, however, is not the core of survival horror.
For example, the scariest games I ever played were System Shock II and Silent Debuggers.
System Shock II didn't have disempowerment as it is commonly defined. However, it did have the long, grinding road of attrition. Similarly, in Silent Debuggers it was rare that any given enemy would threaten you, but trying to hunt them all down before they blew apart critical ship resources was a terrifying ordeal. Especially since every level you advanced left destroyed resources destroyed. Again, attrition. But attrition is just a survival mechanic, not a horror mechanic.
Neither attrition nor disempowerment make a game horrifying. Neither do any competing ideas, such as limited information, excessive travel dangers, safe-and-dangerous zoning, and so on.
There's loads and loads of games that use these things and aren't horrifying. For example, Chess. Cooperative board games. Solitaire.
If you really aren't convinced, think about all the times you had an enforced stealth mission. Was it horrifying when Link had to escape prison again? Was it horrifying when Sam Fischer wasn't allowed to shoot anyone this mission? Similarly, what about when you're deprived of weapons and have to push through the beginning of the third act with your weakest weapon. Those are all disempowerment scenarios. Horrifying?
No! It could be heart-pounding, but that's absolutely unrelated. Football is heart-pounding.
To be blunt, the core of survival horror is the horror part. There's not really many non-survival but-still-horror games on the market, so the two words have become wedded in our mind. Survivalhorror.
The feel of the game owes a lot more to the horror half of that, even though we've been giving the survival half all the credit. Having a tense moment does make it easier to convince you that things are horrifying. But that's more like having a crack to shine the light of horror through, rather than it being the light of horror itself.
What is "horrifying"?
I would say it's seeing people hurt. Broken people. Suffering.
Yeah, that easy.
See, in video games, most of the mobs we face aren't "people". They may be shaped like people, they may even have faces, but we're taught to dehumanize them. They don't have any real human characteristics.
But in a horror game, we give those human characteristics back to the enemies. The enemies are recognizably individuals that have suffered and been driven far past sanity. Bloody nurses, baby-headed spiders, butchers with their faces torn off...
Of course, it's best to take it further. Not only have the enemies been given human characteristics, but the NPCs and often the avatar have been given human characteristics as well.
The avatar is the most common: terror by direct proxy. We put the avatar in a situation that would make him scared, and the player therefore feels his fear. This is the "survival" part. So if you want to talk about survival horror's "disempowerment", this is what you're doing. This one piece. You're building a situation where the avatar should feel scared.
But let's not overlook the NPCs. It's an extremely common and very powerful tool to build up the NPCs as humans before killing them or turning them into monsters. Sometimes it's very quick and easy - a few lines of dialog and then they are eaten by a monster. They are chased down a corridor while you can't follow. You find them dead, with their last email still on their PDA. Whatever. You understand that they were people who suffered.
Sometimes games take it a lot further, a lot more effectively. System Shock 2 is pretty much the reigning king of this even now, with the classic build up and staged reveal of SHODAN. It's actually legitimately horrifying. And the scariest parts of the game are when SHODAN acts more human. Those are the horrifying parts of Portal, as well. You can connect with the enemies as humans all the sudden, which means that they aren't faceless monsters: they're completely broken humans. Horrifying.
The most effective horror methods are those that let us feel the fear and pain of those in the situation. As an example, if a little girl is killed, you'll probably be horrified. But if her family survives it, and you hear their wailing grief... that'll turn it up a lot. This is one reason why horror games tend to torture rather than kill: the expression of pain is horrifying, a very clear way to communicate suffering.
Survival horror. Survival, sure, the survival part. You can argue it's disempowerment. I would argue that it's simply making the challenge of the game "survival" rather than whatever other default you would go for.
It's the "horror" part that matters, though. And that's just seeing suffering, seeing broken humans. Understanding that people hurt.
At least, that's what horrifies me.