I dont think that there is a "new KSR area" in Bangkok (or at least I dont know about it). And yes, KSR is in a way very "mainstream and commercialized", but its not necessarily all in a negative way. And in the recent years I have found that it has again gotten better. What I mean - some 10 years or so ago, I really hated the way it had changed into, but now I feel that its again more relaxed and the ambience has been getting "better" again. Or maybe its just me that has been getting older and / or has changed;-).
I would still stay in Banglampoo, but not right on Kao San Road. I prefer to stay in the surrounding areas, so that I can enjoy the big choice of restaurants, street food, bars, cafes, shops, the Chao Praya river boat stop etc., without being right in KSR. Thanon Phra Arthit or Soi Rambuttri or around there are good options in my opinion.