By definition, new Labels is not actually an improvement - it is a change.

[The_Only_Beta_I_Like_Is_Betamax]

First, I do like the functionality of being able to configure what
labels appear in the side bar. It's a nice CONVENIENCE.

The explicit idea driving that part of the change was to clean up the
side bar. BUT now you're stuck with this plain ol line of ugly text
reading " 3 more" and a drop down menu that can't be removed, unless I
am missing something.

That doesn't make any sense.

So that's really not an improvement as it's technically ADDED clutter
to the side bar for those people who will continue to show all the
default labels as those labels are standard designations across most
webmails - save for chats (which you could already configure to go
away before this change), starred, and All Mail.

Secondly, in adopting gmail, I came to not like labels to embracing
them, especially the ability to color code. Now, creaing color coding
for a new label is a little bit hidden - it's not a part of the Labels
setting screen. By luck I just happened to click next the name of a
new folder andthe color chooser dropped down.

Google datamines everything you put in it in every service and makes a
fortune off selling advertising because they can so perfectly
delivered target advertisments based on that data, and in return all
we get is this lousy thing thats been in beta forever?