When we shoot someone, we expect there to be blood. When we chop someone's limb off, we expect there to be blood. When someone dies in a horrible manner, we expect there to be a pool of blood.
Whithout it, then the game loses a sense of credibility, in which case it doesn't immerse us and make it seem believable. Most gamers want games to seem as real as possible, and when that is broken, then we are taken out of the game.
Now that isn't to say that everyone is like that, as some people (like the TC) probably doesn't care for violence and could be just as happy playing Super Mario Bros...or whatever. But most people want to be immersed as possible by a setting that is as realistic as possible.
How would it make a game appear, if you shot somebody in the face, and skittles poured out of the wound..? Sure, some might laugh & get a kick out of it, but most people would roll their eyes and be annoyed.
Most people (gamers) want realism.
BTW Don't knock it just because you don't like it. Stick with Nintendo made games then. And let the rest of us enjoy our bloody, gory, & violent games.