I suppose I could be called a 'hardcore' GH player. I log more hours on Guitar Hero games than I do on just about any other type of games, although I enjoy the RTS genre and of course multiplayer Smash Bros.
I also play real guitar. OMG. Totally different things. Real guitar costs about as much as a next-gen console + GH + controller for a decent guitar and amp, and the guitar learning curve is MUCH steeper and more complex than the Guitar Hero curve... and you can't play any other games on your amp other than "let's annoy the neighbors."
I have been playing real guitar for about five years now and have prior musical experience with other instruments, and I still can't play "Freebird" or "Cliffs of Dover" on my real guitar. Hell, I can play War Pigs, but that's only third tier GHII, right? Honestly, comparing Guitar Hero to real guitar is like comparing Counter-Strike to paintball; there's a major cost difference between the two, and a reasonable increase in difficulty along with other distinctions.
Guitar Hero can also be a lot more fun as practicing real guitar by yourself is not always fun and can be quite frustrating. Also, having the whole "backing band" behind you in Guitar Hero is very satisfying, as is nailing "that tricky spot." It's like a jumping no-scope headshot to all you Halo players or killing twelve Zerglings with four Marines in Starcraft; that "YES!" feeling.
One of the main reasons I am attracted to Guitar Hero is because it is a very social game. It is easy to get people of all sorts to play with me, even (and especially) women. Try getting a girl with little to no gaming experience to play Halo or Starcraft or Baldur's Gate II and, even if they're willing to try, they get frustrated and confused very quickly. Guitar Hero, on the other hand, is easy to pick up, even for those with little to no prior gaming experience, but difficult to master.
I like the fact that there are hard tracks on GH3; however, I don't think that they should have been in the main setlist. The bonus songs are where the absurd finger-tying stuff should really go, and this is coming from someone who's 4-starred One and Cliffs of Dover, passed Raining Blood, and beaten the Devil. Also, I agree on the "WTF" for quickplay co-op. Online co-op and pro faceoff is awesome though...
I also agree on the negative effects of product placement and the generally ugly look of the game. The drummer in particular moves like a bad Disney robot. And, the new hammer-on system can be confusing. But, overall, there are a lot of great songs and great times to be had with it.
Guitar Hero actually singlehandedly revitalized my interest in gaming. Before Guitar Hero, I had fallen into a pattern of playing games to "beat" them, and not necessarily for fun. Guitar Hero really injected the "pure fun" back into the gaming experience for me in a way that the Wii was supposed to (but didn't for me), and for that alone I strongly recommend it, regardless of how suddenly successful or sold-out it is.
There's this conscious backlash against the "mainstream" and "successful" games, bands, and television shows in today's critical society; to that I say, get off your elitist high chairs and come down and have some fun.