I wonder how the modernization has affected the repertoire.
didn't Mahler redo Beethoven symphonies along these lines?
You have no reason NOT to use any and all capabilities of a piano when performing Bach. It all depends what kind of sound you're going for. Bach didn't write for modern piano, he wrote for harpsichord. If you want authentic sound, play it on a harpsichord. If you want modern piano sound, play it on a modern piano & don't be afraid to use the pedals.The bottom line (to me) is that you're playing it on a different instrument, so play it like it's for that instrument.