The Cheezy One said:
There is a line, and it portrays gamers in a bad light if we cant see that
Couldn't have said it any better. 99% of games are fine with me, but I honestly fail to see the artistic value in Postal or Manhunt, for one (but then, I don't see any merit in gross-out flicks like Human Centipede or Srpski Film, either).
And then, of course, there are those poorly programmed titles/mods which let you murder Jews in concentration camps, torture women and children, or commit acts of terrorism against innocents (I'm not talking about No Russian, by the way, since that did put the whole thing in a context). I'm not sure why such disgusting stuff needs to exist, either.
The difference between games and other forms of entertainment will always be interactivity. Reading about doing something disturbing or repugnant does not necessarily make you party to that act - however, in games, it is you who control the action. In a book or movie, you are not made to do anything other than pay attention and either approve or disapprove, but in games, nothing happens unless you make it happen. In a certain but very real sense, you are doing that stuff.
So there IS a difference. When reading about some islamist shooting at a school bus, that is not you. When watching a movie about Auschwitz, you're not doing anything. In fiction, you will rarely find that the character doing such things is the one that the audience is supposed to identify with (well, there IS Hannibal Lecter...). But put those scenarios in a game, and it becomes something else entirely.
And there are boundaries which really shouldn't be crossed.