I'm too young to directly compare to 86 or the 50s/60s, but certainly the best defence I've ever seen was from 97-99.
Yes 1997, when we went 2-16.
Honestly, if we hadn't had an offensive line that year that was about as effective as laying a wet towel across the line of scrimmage, then I think we could have gone to the cup. Our defence was just that good. The offence though was so incredibly awful that the defence had to play most of the game. We actually lost a lot of close games in the end.
In 98 we added Danny Mac, who didn't need an offensive line anyway. We added Darren Flutie. We brought in Lancaster. We even brought back Don Sutherin, the 97 Head Coach, as Defensive Coordinator. We came first in the East and lost the Cup on a last play field goal. Big name moves but really, it only took a few key ones to turn that team from 2-16 into a major contender. The holes were big, but they were few, and that's why we were able to make such a big turnaround so quickly.
In a way this year has reminded me a lot of 97. Despite our record, the team is quite competitive and IMO we're just a couple missing pieces from being among the elite, IMO. I think we have our best defence since that era (though that's not saying much at all). We can rely on the defence to keep us in it but we just keep losing all the close ones. With our O-line healing though and Collaros looking pretty good, I'm getting really excited though.
BTW, Steinauer was a big part of that defence from 97-99. I don't think this is a cooincidence.