He's been in Hell awhile now by the time these events happen right? Maybe its taken a toll on him and his ability to enter dreams.

The reasoning for him being so weak in Freddy Vs. Jason but NOT in the original NOES is because Freddy constantly finds ways to go around the rules of whose dreams he can enter. While he was bound by some rules in the start, he constantly finds loopholes to exploit to keep himself in the game
NOES 1-3:
At this point, Freddy can ONLY enter the dreams of the children of those responsible for his death. The majority of these people lived on Elm Street. As such, the teens who dreams Freddy can enter are referred to as The Elm Street Children, whether they lived on the street itself or not.
In this instance, think of Freddy like a curse. He can harm anyone under the rules established above any way he feels. Though, as he functions in a dreams, he still relies on fear to make his control over the dream world stronger. This is why Nancy was able to depower him long enough to get ahold of Hypnocil and stop dreaming.
In NOES 3, Freddy finds a means to further strengthen his power by stealing the souls of his victims. He holds them in himself, keeping them in a constant nightmare. Since these souls are kept in a constant state of fear, they power Freddy like a perpetual battery. He's still bound ONLY to the dreams of Elm Street Children BUT he no longer relies on their fear alone as he can tap into the fear of past Elm street Children he's killed.
Noes 4:
Here we're introduced to a new concept of Freddy not yet explored. He can function like a curse AND an infection.
While Freddy is still bound to Elm Street Children's dreams, he also finds a special opportunity to gain access to the dreams of a NON-Elm Street Child thanks to Kristen Parker, who is at this point the last Elm Street Child. Kristen uses her telepathic powers to bring in Alice Johnson (who herself is the Dream Master and thus can absorb powers of the dead just as Freddy can absorb souls) into her dreams. After killing Kristen, Freddy somehow still has access to Alice's dreams DESPITE her not being an Elm Street Child. The reasoning for this is once Freddy find a way into your dreams, you can't get him out. You're infected and the only cure is to defeat him or your own death.
We see that Freddy must use Alice and then her telepathically gifted son Jacob to access the dreams of others. But, most importantly, we learn of the concept of the dream gates. There's a good dream gate and an evil dream gate. Dream Master like Alice guard the good dream gate while Dream Masters like Freddy use their gates to bring nightmares into the world.
In a way, it's as if Freddy KNEW without the Elm Street Children's dreams, he'd be done for since the curse would be over, as well. His initial purpose was to dispose of the Elm Street Children and without anymore, he'swell, finished. Thus, Freddy used the destiny of the Dream Master to sort of "hack" the rules. As long as he's in the dreams of a Dream Master, who themselves MUST enter the dreams of others to do their job of protecting dreams, Freddy would be able to "hitch a ride" and infect the dreams of those they dream with. If the Dream Master uses his or her power, Freddy has the chance at a free snack and prolong survival.
Freddy's Nightmares/Freddy's Dead:
At this point, a lot of time has passed and Freddy now functions under more dangerous rules. He can enter the dreams of anyone in Springwood who fears him. Through the television show
Freddy's Nightmares
, we see he has access to anyone without the need of them being either an Elm Street Child OR being being connected to Alice/Jacob Johnson.
The theory surrounding this is that because Alice and Jacob moved away and Freddy had gained so much power from souls and general fear, he was able to literally change the rules on his own. No one was guarding the good dream gate in Springwood anymore but EVERYONE knew Freddy was a threat due to the last 5 events. So, Freddy found a way to pull the entire city into his own nightmare. It wasn't until Freddy's daughter Maggie killed him that the town caught a break
Freddy vs. Jason:
At this point, we're still working off the same rules from before BUT the parents of Springwood got wise and quarantined any child who would inform the other children of Freddy. From there, we can surmise that Freddy slowly weakened from a.) Being killed, b.) losing his souls in a previous battle, and c.) having no one to fear him.
BUT, of coarse, Freddy had a trump card in Jason. Now, HOW Freddy was able to access Jason's dreams is anyone guess. But, I theorize that Jason falls into the category of "children who fear Freddy." As a child, we know Jason was constantly assaulted by fellow campers and camp councilors. What better way to keep a special needs child in constant fear than to tell him the Boogeyman was going to kill him in his sleep. Jason would be a wreck while awake AND when trying to escape his daily torture through dreaming. Thus, as the Jason we know of today is basically just a super zombie with the mind of an angry child, we can assume h

Smith25 posted
One subtle scene saves the whole premise. Freddy's history wasn't covered up in the first movie, this is made clear by the jump rope song that the little girls sang, Tina even acknowledged it when they arrived at school, so Freddy was nothing more than a mythical boogyman to the kids. Still, fear is fear, and it was that little fear that gave him the power to haunt their dreams.
I don't know if you were responding to me Smith but what I said was after the events of the last Freddy film before this is probably when Adults started deleting records of Freddy related deaths. It also would make sense considering the fact they showed all the previous films in the beginning when Freddy was narrating.
Green Goblin is great!

One subtle scene saves the whole premise. Freddy's history wasn't covered up in the first movie, this is made clear by the jump rope song that the little girls sang, Tina even acknowledged it when they arrived at school, so Freddy was nothing more than a mythical boogyman to the kids. Still, fear is fear, and it was that little fear that gave him the power to haunt their dreams.

The rules as to how Freddy could get to his victims always confused me, but I'll give it a shot.
He initially could really only invade your dreams if your parents were part of the mob that killed him. But this makes me wonder how he could invade Jesse's dream in 2 as Jesse isn't an Elm Street kid. In 4, Freddy finishes off the Elm Street kids and now needs Alice who gained Kristen's power of pulling people into her dreams to get to non-Elm Street kids. And 3 reveals that he gains more power from the people he kills so I guess he eventually becomes powerful enough to invade anyone's dreams. Then I guess after he "dies" in 6, he is now weakened and the town suppress him in order to protect the kids.

This is my take on it. The first film was the first time he killed kids in their dreams. He later killed more kids in their dreams which gave him more power with all the fear he spread. But later when so many adults caught on to this, they got rid of his power by putting all the kids who had dreamed about him into the mental institution and putting them in comas by putting too much hyponocil into them.
They also erased records of Freddy related deaths from every media in the town. That way he basically couldn't do anything to anyone cause without the kids dreaming about him telling other kids about him, he can't do anything to the ones who don't know about him.
Green Goblin is great!