I think a degree of unrealism is what makes some games fun. While some games have got pretty impressive physics engines, storylines and general gameplay, sometimes it's nice to have that bit of fantasy or madness to keep things interesting. If a game is trying to be realistic (for instance with an FPS, racing or simulation game) then naturally it's a good thing, but when playing something like Mario Kart, I'm not terribly concerned about it being realistic. I think most games are unrealistic at the end of the day, but that's because they are artificial and not real life to begin with.