Is the mussar book Reishis Chachma considered still relevant for our generation? Seems to me it has very high demands of the reader. Please cite your source: any authority who says the book is or is not relevant now.
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See here (search for the word Reishis) where the Lubavitcher Rebbe specifically instructs the Choson to learn the relevant section regarding marital behavior right before the wedding. This was written to many different ones over several years, and is regarded as part of the standard wedding preparations in Chabad now.
As I understood from HaRav Gudlevsky (http://azamra.co.il), mussar books are meant to bring reader closer to Hashem. If person gets negative emotions such as sadness, depression, etc. by reading - it pushes him away from Hashem. See also here http://breslov.org/ask-a-breslover-drawing-shabat-into-the-week-2/
As You put it's not a bad book - it is a different generation.
It should also said, that this book is huge and it's not all about gehinom, punishments, etc. I personally found interesting and inspiring chapters about food and eating, about relations between husband and wife and how they can have good children. It helps person to get right perspective on things.