I know lots of people have this experience with old writing (or any kind of work, perhaps..) especially as students or people still learning their craft. I had a similar kind of experience when I discovered some old first-year essays while helping my parents to move a few months ago, but that was slightly different. That was more nostalgic. My run-in with the honours dissertation could be more aptly described as horrific. It read like I was a Neanderthal belting around in a dark cave looking for a light switch. The continuity between paragraphs was atrocious, my expression was 'experimental' at best and the literature I was engaging with looks like it was just whatever was laying around at the time.
I think partly I have improved slightly, but it's also partly about the way my style has developed I suppose. As in, I'm getting close to actually working out what my style of writing and my approach to research might be. And that stuff in the honours dissertation is not it! I wonder if I'll look back on my PhD thesis in five or ten years time and be similarly horrified? The scary part is that as I send stuff out into the inter-nether, I won't be able to just lock it away in the filing cabinet if (read: when) I turn around and don't like it anymore. Also, how long does the 'Oh I was young and foolish!' thing work for?
[Actual depiction of honours dissertation- stock from mjranum]