I'm pretty sure that before the Hakurei Border, youkai were even stronger than they were in modern Gensokyo.
http://touhou.wikia.com/wiki/Perfect_Memento:_MonologueFrom my perspective, the power of today's youkai has not weakened; on the contrary, it's too much for the small area that is Gensokyo. The border establishes at 0 AD
I think you've mistaken
0 (~1885 A.D.) - creation of the Great Hakurei Border
with 0 A.D.
regarding fights between youkai and humans, that's why the spellcard rules have been created, to avoid lethal fights, and to allow youkai and humans to keep fighting each other (especially because, with the spellcard rules, the Hakurei Shrine Maiden can be defeated without any serious consequences to Gensokyo), or else their abilities will diminish, making it easier for them to be overpowered by powerful outsiders. (I once mentioned, somewhere else, that MoF did a good job in exemplifying that case, and may have mentioned, yet elsewhere, that Marisa was clever, in SSiB, to get Yorihime to play under these rules, in order to avoid a serious fight, and to give them more chances of trying to win over her)
Analyzing her further:
In MarisaA's scenario, Byakuren mentions she was sealed for using magic, and that she wanted people to call Youkai equals because she could use magic.
She asked if it was "okay" to use magic.
from MarisaA's
scenario, Marisa could've been treated the same way as Byakuren, if she were in Byakuren's place, except that Byakuren uses her magic to preserve herself, while Marisa.. blows stuff up.
Marisa: What?
You were sealed away because you used magic?
Byakuren: Yes, that's why I recognized youkai as equals
and called on others to do the same. Will you support me in that?Byakuren's profile page says that she needed humans to believe in the existance of youkai and her own powers, or else her magic wouldn't work, and she would be susceptible to aging to death. So, she sought to preserve youkai from extinction. Later on, she would become a youkai herself, but there's no actual proof that she would use her magic to try to overpower humans, just speculations, theories, wishful thinkings, nothing more. (the only exception that I can think of, would be that youkai "must" attack humans, as well as humans are supposed to counterattack them, but this problem was addressed during the
creation of the spellcard rules already, a process in which both human and youkai have participated and agreed on. Perhaps these rules are one of ZUN's ways of telling us that the characters do Take It Easy during the games, and that the setting is peaceful, other ways being ZUN's
description of Alice's boss theme in PCB, and his
afterword in PMiSS. Finally, Akyu's
monologue section in PMiSS)
(from the afterword section):
I've said it so many times now, Gensokyo is idyllic and pastoral, and is a "peace at any price" kind of a world.And when MarisaA says that humans are still being oppressed, Byakuren denies it saying that humans haven't changed, hinting that things were always the same.
Marisa: Saying youkai and humans are equal
doesn't make it true.
Especially coming from a youkai like you.
Byakuren: I see; I've already given up my humanity. I suppose it's pointless for a non-human like me to appeal for equality.
Marisa: That's right.
Byakuren: Humans haven't changed since my days in the temple.
How superficial, greedy, and unjust you are!
Now, namusan ―― !Humans aren't "still being opressed", humans are "weaker and need more protection" than youkai, in Marisa's opinion. Marisa doesn't know Byakuren's motivations for trying to preserve youkai, and by extension, herself.
Byakuren replies, saying that humans haven't changed, referring to how they would chase youkai, and how they've treated her before. Byakuren also doesn't know, by the time she meets Marisa, about how the relationship between humans and youkai have developed. (sure, she's not supposed to even know about the spellcard rules, but apparently nearly everyone that appears in the games -- Sanae, Kanako, Utsuho, etc. -- can adapt themselves quickly enough. Also, what if Byakuren for some reason couldn't follow the spellcard system, ever? Either she would be fighting seriously, which is something that goes against the usual mood of the series, or.. she wouldn't be able to attack/defend herself at all. Who would play a shmup where the final boss doesn't offer any danger at all?
)
In SanaeB's scenario, Byakuren says she wants to create a world where all is equal because Youkai is oppressed, and she attacks Sanae because Sanae disagrees.
http://touhou.wikia.com/wiki/Undefined_Fantastic_Object:_Sanae_B%27s_Scenario
Sanae: Of course, I'm a god.
I understand the youkai were all trying to revive you,
but why?
Byakuren: The youkai ... were there perhaps
a tiger, a ghost spirit, and a Nyuudo?
Sanae: Mmm, that's about right.
Byakuren: I see ... so they all
still miss me ...
Even though I haven't been able to do anything for them
for over a thousand years ...
Sanae: Help them?
Are you a friend of the youkai?
Byakuren: A friend ... yes, I suppose I am,
but I'm also a friend to humans.
I want to create a world where humans and youkai live as equals.
I don't know if a god like you could understand,
but I want to see the oppressed youkai regain their status.
Sanae: Equals? Oppressed?
Whichever way you look at it,
humans are the ones being oppressed!
I want to see humans regain their status!
Byakuren: I see, it's too bad a living god couldn't see it my way.
However, I don't distinguish between youkai and gods.
Sanae: The wholesome gods hunt the wicked youkai!
Byakuren: Humans haven't changed since my days in the temple.
How self-righteous; you're an evil drag on us all!
Now, namusan -- ! Sanae picks a fight with her, both come from different viewpoints, as it was with Marisa's case (and both were, to me, convenient excuses so we could have a boss fight)
I'll continue later, no time left for today.