Yes, from the perspective of the individual countries, the old policy is more fair. If you gave all of the countries of the world one vote each and had them vote, that's what you would get. However, if you gave all of the people of the world one vote, that is not what you would get as the people in the more populous countries would want their country to send more people.
As I explained, it is fair to the group not to the individual. All countries were capped at 7% of the total so large groups (and here we group by countries) would not crowd out small groups. You obviously don't like that policy.
As for the diversity argument, I am not stating wether it is better or worse. I explicitly said that it is up to society to decide that and our legislators have chosen to go with the less diversity option, so there you go. I think the fact that it will cause a reduction of diversity - diversity in the sense of what country immigrants come from, not cultural diversity - in applicants is indisputable. It is important to understand the consequences of our choices and this is one of them.
Also, I didn't lump all of India's diverse cultures into one group, India (and I guess the British and French) did. The grouping is done by country because that's how immigration laws and treaties work. I am fully aware of the cultural diversity in India.