It's the same today - S/4HANA is still accessible from the GUI and DIAG is still used. Web applications (which SAP is pushing customers towards) are freed from this, of course (they talk native http to the SAP application server).
Remember that back in the late 90s SAP had a native GUI that ran on Windows, OS/2 and Unix (Motif-based) and each had their own native controls (a native Windows listbox is implemented differently from a Motif one, for example). Developers would develop a UI in ABAP with platform-independent controls and that UI would be sent over the wire to the client as DIAG and the client would translate that into the native control and data, etc for the end user.
