The story is part of the game experience - a crucial part. It can be told in cut scenes, character dialog, text in various books thrown around the environment, etc. Depends on the game.
Without a story it is just Counterstrike - a bunch of guys running around and shooting each other for no particular reason. Which can be quite fun, don't get me wrong - but it is not the only thing to a game.
Charecter development is when I get a new weapon/attack/spell.
Are you saying that this is what character development should be in games, or what you've seen?
Also, character development is fairly rare in games (although it exists and can be quite deep), because most games are focused on the player alone. Character development was just my example of something that is integral to stories and present in movies - but not in porn. You are essentially trying say that games should be like amature porn - just direct feelings, an experience, without anything deeper.
I think that you are completely wrong about that - stories add a great deal to a game, and they are something to be desired, not mocked.