It is interesting how games differ from sports or academic contests. In sports, losing is OK because it makes you work harder to become stronger or smarter. In games, losing (or winning) is almost pointless because getting better at the game doesn't make you better at anything else in your life; so the value is in feeding some emotional or anesthetic aspect.
That probably only applies to single player games. You can compare single player games to movies: you can't "lose" in a movie. Multi-player games are more like sports, in which case losing has a different meaning.
