Videogames are "fun" because you enter a realm where you can escape the pressures of "the real world" and enjoy a fantasic RPG or an exciting shooter or a pedal-to-the-metal race.
They are fun because it pleasures the brain by releasing endorphins. That makes us feel good.
Also, as many have said, they make us feel on top of the world, the king of kings, the almighty, the superior. I get this feeling when playing violent games such as God of War and Postal 2.
Not saying I am a violent person or not. I enjoy RPGs as much as the next guy but most of the time, I end up frustrated. But when I overcome an obstacle in my way, I celebrate. Beating a mission on Tony Hawks American Wasteland made me very happy. Slaughtering hundreds of Hades' undead soldiers and ripping of harpy wings in God of War makes me grin with anger. Games are fun to some, annoying to others and degrading to some politic ians. It our job as gamers to dispell those hateful remarks and show that games are more than just evil and vile things but joyous and wonderful creations that entertains you and helps hand-eye coordination.
/end rant