I...that... you... if I'm sleepwalking and somehow found a way to log into your account and type this, I apologize. That was said pretty much exactly word for word how I would describe it. And the thing about kids being raised on participation medals? Spot on. Exactly the problem with society today. Society has failed to acknowledge that life consists of a few winners and a whole lot of losers. The human race is effectively flawed because we're the only species that doesn't kill off it's weak.
Now while I admit we can't just go around killing off those people that aren't worth anything to society (as much as I like this idea), the issue still stands that the very people who are a drain on society are the people that have the largest opinion and largest voice in society. They're the ones throwing tea parties and holding anti-gun petitions. They're offering absolutely nothing of worth to society, but they expect everybody else to cater to them.
Now I can't speak for other countries as I imagine every country is different, but I know in America this is the case. Our citizens are deluded into believing they're all special and all self-deserving and should be handed everything on a silver platter and the unfortunate side effect is the hard working people that give back usually get shafted by the lower beings who are, for whatever turn of luck, hold all the cards.
Bringing it into videogame terms, just as you said, videogames are being dumbed down and simplified so that people can get into them with little to no effort and feel good about themselves. Hell, even things like Disney World, which I remember being full of learning and educational hoohah when I was a child, is completely dumbed down and idiot-proof these days. Why go and learn about things like Water Molecules and Space when you can ride colorful things with funny noises?
Anybody that hasn't seen this movie yet, I highly recommend Idiocracy. This is a perfect example of where Humanity is going to end up if people don't act. And although it doesn't have anything to do with videogames, the videogame industry is a growing form of mass media. It is one of the largest and fastest growing forms of communication in the world. So what kind of message does it portray when developers treat us like idiots by dumbing their games down, but when people respond positively to having their videogames spoonfed to them like infants?
Fear not, my brothers! The next generation of gaming is upon us! Be glad! A reward for all your toil and all your sacrifices is upon us.
There are those who said this day would never come. What have they to say now?
(Yes, I ripped off a quote from Halo 2 and modified it to my own purposes. Sue me.)