There's two kinds of stealth.
Passive stealth is about sneaking up on enemies and killing them before they know you're there. This is about being careful, slow, and methodical.
Active stealth is about getting engaged in a fight where the enemies know that you're around somewhere and they're actively looking for you. This kind of stealth is built around messing around with the heads of the enemy.
Splinter Cell Conviction is an amazing active stealth game. All the haters were just disappointed that it wasn't passive stealth like the previous Splinter Cell games.
I hated it because the "stealth" you describe usually revolved around killing enemies. You're mostly correct in your description but the way you deal with those enemies is by shooting them with your super-awesome auto headshot-through-walls mechanic and by other guns. It's extremely hard to sneak by people or use the environment on them except for a few cases where they place a few guys directly under a chandelier as a big "HEY SHOOT THIS" message.