I just can't resist a video games as art thread... I'm totally a sucker for this kind of thing
forgive me if I'm rehashing anything... only had time to skim through the thread
As others have said, you can't define anything as art until you know what your definition of art is. People have been disagreeing on the nature of art for a very long time, so it's not likely to be resolved anytime soon.
My personal definition of art - the sharing of human perspective and experience. This is why certain things we do get labeled as artistic mediums, because they are effective methods of representing human perspective and experience.
To elaborate, simply telling someone in a straightforward manner what my thoughts or experiences are is not art. For instance, my post in this debate is not art. I'm simply speaking in a straightforward manner. Attempting to share perspective/experience with someone by less straightforward but more thorough means through representation is art. When you read a book and feel like you've just lived a chunk of someone else's life, you've just experienced artistic communication.
Again, this is just my opinion of what constitutes art.
Relating this back to video games, I cannot tell you how many games I have played which have effected me in this manner. Interactivity is a powerful artistic tool as it draws people further into an experience than would otherwise be possible.
The strongest recent example for me, personally, is Audiosurf. Music has always been a really deep experience for me, and I've enjoyed visualization software such as Milkdrop for a few years already. Audiosurf is like a zen for me. It not only draws me into my music visually, but actively engages my participation with it. It's as though the music I am listening to is a place with a deep sense of space, direction, momentum, and color, and I am dancing with it - weaving between the percussion, bouncing with the beats, and running with the tempo all in the midst of a surreal landscape every element of which relates to the music I'm listening to.
For me, this is art in finest form, and it wouldn't be possible without the video game element of interactivity.