I absolutely love Rock Band, and I love music. I'm not even half-bad with an instrument (I learned a few in my childhood, but never stuck with any of them). There's a reason Rock Band appeals to me, and I'm not surprised that professionals like Jimmy Page don't share that same reason.
Many music fans only wish that they could play those songs. How many people have rocked out with an air guitar to Stairway to Heaven? Should they stop pretending and get a real guitar? The truth is, they'll never be able to attain that, but they enjoy the connection to music that comes with pretending. It's both an enjoyment and celebration of the art. It's not meant to be a replacement for the real thing.
This is exactly where Rock Band fits in. Not only do you get to pretend to play your favorite song (that you know you could never learn to play for real), but you get to do so in a way that feels much more real (than, say, air guitar) and you can get the fun and challenge of playing a game while doing so.
The assertion that kids are being exposed to music through video games sounds like a lot of marketing to me. There's still radio, there's still MTV (well, when it's not reality TV game shows), and kids are buying more music than ever before. If it were true that video games are all that kids play and the only way to reach them with music is to put it in to a game, then yes, that would be sad, but I don't believe the premise.
As for Jimmy Page, I think he should sit down and play Rock Band, just once. Sure, it's not the real thing, but it certainly does emulate it. Guitar (for the most part) is played by holding down combinations of strings at various positions with one hand and strumming those strings with the other -- almost exactly what you do with the plastic peripheral. The timing, the dexterity, even some of the awkward hand positions are the same as what you need in order to play a real guitar. Hell, they even teach you about more advanced techniques like hammer-ons and pull-offs. Sure, playing Guitar Hero won't teach you how to play a real guitar, but it will certainly train some of the skills that playing guitar requires.
And the guitar is the least realistic of the instruments. The drums, while not as full of a set, still require hitting the right drums at just the right times, including stepping on the pedal for the kick drum. The same skills that make a person a good drummer make them good at the Rock Band drums, and many of those same basic skills can be learned while playing the Rock Band drums. Singing is even more realistic -- lyrics, timing, and pitch make up almost the entirety of singing, and believe me, if you can't sing, you'll have a hard time fooling the game.
Now look at this from the perspective of teaching music. My sister uses Rock Band with her students and finds it helps teach them many basic skills: sight reading, timing, and several of the techniques for using the actual instruments. Where else could you get a drum set and guitar, with a catalog of music and a personal trainer for $200? Again, it's not the real thing, but it's close enough to be quite useful to a beginner, and it's a lot more fun than practising your scales ad nauseum.
And you know what? It gets kids interested in playing music. Many kids who enjoy music never dream that they might actually be able to play an instrument or sing a tune. I know many people personally who would never sing in public, but will sing along to Rock Band. Giving kids a chance to try their hand at perfoming, in a simpler, more approachable manner, just might convince a kid that they really could play an instrument. It wouldn't be the first time I've seen somebody buy a guitar or go for vocal lessons after playing Rock Band. Heck, an actual drummer convinced me to learn drums from him after seeing me play the drums on Rock Band. What more could professional musicians ask for than to get young people interested in their craft?
I think Jack White and Jimmy Page need to come down from their ivory tower and see what it looks like at the bottom. Not everybody is a professional musician, or even an aspiring musician. Music games give us mere mortals a way to connect with and enjoy music. Any musician should be pleased that a new medium is bringing more people to their work and allowing them to experience and appreciate it in new ways.