I think this gets down to the bottom line that in the end James is looking at the medium in terms of what it is, and all that it can be, where Tom is fundementally threatened by that point of view because of the potential threat it represents to the business end of things.
We saw something similar referanced here on The Escapist earlier:
http://www.escapistmagazine.com/forums/read/9.296043-Shigeru-Miyamoto-views-games-as-products-not-art
(Which is in Japanese, but part of it was translated as part of that post)
Basically a game creator/publisher wants to firmly hold all credit, and ownership of anything they produce. The end goal nowadays being to produce a product that will sell to a specific audience, rather than to really explore anything new, or inspire an audience to climb to it's level. It's all about "do the numbers show this will succeed" rather than "wow, that's a really awesome idea for a game, let's do that".
When you start acknowleging something as being art, or the nessecity of the end user as part of the creative process, well that starts to create some interesting philsophical issues, and if acknowleged could even lead to LEGAL difficulties down the road.
I say this because I think the analogy of sports is flawed. It's probably better to look at arthouse theater, the kinds of things done by improv groups. The structure of the play or performance already exists, but part of a lot of these productions is to get the spectators involved and pull them into the production where they become part of it. This can be as simple as a group of players picking people out of the crowd to do things, or as more abstract as a group of artists wandering around in costume, trying to get reactions from people based on how they dress and act.
There have been issues however when various groups of players doing things like this have wanted to try and sell recordings of their work. It can vary from place to place, but basically if you pull some guy up on your makeshift stage as a volunteer, record it, and then sell the recording, that guy can pretty much turn around and say "hey, where's my cut?" and in a lot of places they could make a valid case out of that if they didn't have to sign a waiver or anything beforehand. A lot more could be said about it, but you should get the gist of it.
The last thing the gaming industry wants is to acknowlege the user as anything but a cashbag to be treated with contempt and milked for profits. Indeed, general contempt for the user base and fans is one of the big reasons why we're seeing a rising amount of anger being direct against the gaming industry, leading to things like death threats being made against PR guys (which was also mentioned here on The Escapist).
On the surface the EULA would seem like it should cover the bases for a game, but in reality these things have never been properly challenged. Given enough time and provocation and it will eventually happen though, and I don't think the gaming industry will win. Most upholdings of the EULAs have happened due to the wrong avenues of attack being used (I've read some stuff on it), in part due to most of the lawyers who know anything about this area of law being paid by, or paid off by (to cause a conflict of interests by acting against) big gaming companies). Issues like how the EULA isn't even visible in most cases until you've already paid for a product (when technically you should sign it as your paying for it), and then a whole area of contract law comes down to length and wording. I'm no expert on it, but basically a contract that is too long, complicated, or difficult for "the everyman" to understand can be overturned fairly easily, "oh you should have read the fine print" doesn't work IRL like it does in the movies usually. This is why with most major contracts of extreme length and with a lot of details, you have notaries involved usually. Notaries being neutral parties that pretty much read the contract, listen to what is said, and then sign off or "notarize" the document. In case of dispute they are called up to verify that everyone was in agreement, and in many cases to explain their understanding of the contract in question.
In short, the bottom line is that your current game designers and publishers pretty much want games to be viewed as a straightforward product... well as straightforward as they can be given the current trend towards argueing that the person paying gets nothing but the right to use their work for as long as it amuses them. The "games as art" thing might carry a lot of legal weight against censorship, but the industry doesn't actually WANT games to be artistic, they want games to make money off of, and in the end could really care less about the medium itself other than it bringing in the paychecks and profits. The last thing they need is to feel like they should see their consumers as equally viable human beings, never mind as part of the process itself, and god forbid someone looks at a definition of gaming and say sends EA a bill for their participation in the art project... which in some places you might be able to do by James' definition. It might not stand up in court, but would probably go to court, and probably more than once.