Absolutely! I loved having the ability to just blow off some steam by turning on godmode and spawning half a dozen enemies (dark jedis, AT-STs, etc) and just as many jedi in Jedi Knight and watching the carnage. It was fun I tell you! I won't even get into the stuff I used to do in the GTA games when they were still good, because it's extremely NSFW. Suffice it to say it involved a giant dildo, a flamethrower, several prostitutes, and as many of those satchel charges as I could fit onto one car. Good times...
As for the cheats taking the fun/challenge out of games? BULLFUCKINGSHIT! The challenge in games has been reduced to idiotic monotony, the same stupid fights over and over. And QTEs. And forced vehicle sections with bad controls. And regenerating health. And autosaves at every ten steps. Sorry, but games haven't been challenging in ages. Besides, it's not like anybody forces you to cheat? Sure, it's more satisfying to get past a certain difficult section without godmode, but is something as trivial as a trophy/achievement really worth the frustration? My $0.02: remove retarded achievements, and insert hilarious cheats instead. More fun for everybody.
To give an example, I was playing Clive Barker's Jericho a while back. It's a terrible game, I mean just about every design aspect is seriously flawed. The worst was easily the combat, as enemies could spawn atop of you (okay), spawn endlessly unless you move forward or hold a position, which is never actually clarified (sigh), suicide bomber enemies that don't damage enemies when blowing up (fuck), with lots of health (damnit!), and glowing weakpoints that your teammates diligently ignore (FFFFFUUUUUUU). I eventually got stuck in a narrow corridor where those bastards just kept spawning on both ends, and my retarded teammates found humping the walls much more edifying than shooting the enemies. I rage quit several dozen times, until I found a trainer that reduced the enemies' health by 80%. Wow, suddenly this game is fun! It's a bit like Painkiller, only bloodier and far from being as good. I could actually start to enjoy the horribly written story now. And experiment with the various powers my teammates have without the fear of getting blown up by a suicide bombing **** that spawn under my feet.