I think that as cars became more prevalent in the 50's and 60's, that allowed the wealthy who lived in Gazcue to move to larger homes with lots more property in the Arroyo Hondo neighborhood, and that sort of lead to a decline in Gazcue a bit. There are still lots of nice streets and houses in Gazcue, but traffic wise and noise wise, it is much busier with a more city-like atmosphere then Arroyo Hondo, which is much quieter, with a more suburban feel. I love walking around Gazcue though, and have always loved its central location to everything - one direction is the Zona Colonial, one direction is the University, one direction is the Malecon, one direction is the Museum and National Theater, all within walking distance (at least for a walker like me).
There is a wondeful book called 'An Architectural Guide to Santo Domingo' (Guia de Arquitectura Santo Domingo) that is in English/Spanish, loaded with pictures, maps, history, history of various architectural styles, and facts about all the areas of Santo Domingo, including Gazcue, that I highly recommend for any lover of the city or of architecture in general. I purchased my copy at Liberia Cuesta at Lincoln and Ave. Feb. 27. I will try to take a few pictures of the book so that folks get a general idea of what it is like and post those pics later!