The dungeon generation code in Angband hasn't been touched in a long time. There are, as such, some issues with it.
- Levels are not similar enough. In particular, level feelings are almost required to stop you trekking through miles of unrewarded passages. Guarantees of so-many things happening at such a level are too predictable, but generally dungeons should be less extremely variable. This would allow removal of preserve.
- Levels are not different enough. All levels are generated the same size, since Ben. It would be good to have variable-sized dungeons, such that levels rarely went over 4/5 the current size and sometimes could be as small as a single screen. New kinds of pits and rooms would help also (even arena, and cavern levels). Maze levels where you are trying to get to a special room/vault at the end of it. Angband 2.4 had special quest levels. OAngband has interesting rooms. etc etc.
- There are too many things. There are too many monsters generally. Pits need to be reduced in size (S goes from 5x19 -> 3x7). Fewer objects should be found on floors.