A bit off to left field here, as I play LOTRO, but the reason for playing is still the same, it's a simple, immersing experience that lets you blow off steam for a bit, and part of the that is a challenge; I think it's the same as any game, yes, it is nice to finally become all big and swollen and god like and be able to kill everything by looking at it cross-eyed, but the FUN wears thin real quick. Perfect example being Force Unleashed, yes, it was a short game and very predictable, but the story was good and so was the game play, but if you have a second go at it with the cheat codes, well, bathing a room with double handed force lighting is cool, but there's no enjoyment after, oh, say, half a level?
LOTRO just released their own expansion a while back, and one of the features is to progress to level 60 (laughable to you WoW kids, I'm sure.) which actually brought me back into the game. Having maxed out on the old expansion, I had gotten bored because it had become all grind just to level up my skills, and whenever I did have to venture forth out into the world to find things, it was no fun because everything had become *WHACK* "Your mighty blow defeated [insert creature name here]" Now, with another ten levels still to go, there's things out there that I actually run from now, hell, I actually had to call on my Fellowship (read: guild) to come and help for the first time in almost a year; it was actually kind of nice.
I guess what I'm taking forever to say is that without challenge, a game as epic as even WoW can get stale pretty quick, and games aimed at "casual" players don't hold much of a challenge for the "hardcore" set...which is why I'm glad I'm stuck somewhere in the middle.