No, of course the Church has never lost the Holy Spirit. But it has lost the understanding of one of the most basic roles the Holy Spirit plays in the life of the Church, and Vatican II and the CCR movement are attempting to bring that understanding back into the light.
I often hear people saying that seeking these gifts if self-centered, and I think it shows really how far the misunderstanding has gone. The charismatic gifts are primarily gifts orientated towards service of others in the Body of Christ. They are meant to be given away, in a sense. If you have the gift of healing, for instance, it is not for you. It’s for someone that God uses you to heal. Or a prophecy. God uses you as His instrument to build up someone else’s faith. This is the basic way the Mystical Body is supposed to work, according to Paul. Each are given their own charisms, which play off each other (like hands and legs and eyes in the Body). They are meant to be of service.
I think people so often confuse extraordinary spiritual consolations (like for instance visions or private revelations) with the charisms. We should certainly not seek these. But the charisms are on a different level. They almost must be sought, because the Holy Spirit requires us to be open and cooperating with His grace in order for us to make use of the charisms. And Scripture is clear about seeking them: Seek eagerly the greatest spiritual gifts, especially prophecy. Seek to have an abundance of charisms for the upbuilding of the church. Paul’s many injunctions to pray in tongues. They should not be sought rashly, as Lumen gentium notes, but…
This movement is traditional, because it goes back to the very basic underlying dimension of christian life - the charismatic dimension. See above. I mean, technically, speaking in tongues you know was the first thing the Catholic Church ever did. See Acts 2.

Yeah, it’s totally traditional. That’s why it’s called a “renewal” movement. It’s bringing back something from the past.