I'm going to be very careful saying this, as this is always and will always be a very controversial topic, gamers or not.
Throughout history, such ideas as blood, gore, violence, bloodshed, war, and the like are a staple. They ARE a fact of life, and anyone trying to say otherwise is deluded. People die, people kill, and IRL, you don't just go squish. There is pain, there is death.
I think what the biggest fear is from parents about bloody video games is that they are desensitizing youth. Maybe, and maybe that is a good thing, since it would prepare them for the real world, which is NOT a nice place (don't know why I emphasized that, we all already know it, right?). But to believe that someone can kill just because they played a level of Wolfenstein is utter bullshit. I don't mean the physical ability to kill, but the emotional and mental capacity to kill, to take a life. Have you ever really sat down and thought really hard about it? It isn't fun, regardless of what you may say online.
These arguments alway come back to ratings, Banning, Parental fits over their children's games, when its stupid to still call it an argument. A rating system is in place. It is the PARENT'S FAULT, NONE OTHERS, if their precious little Mathy or whatever gets his hands on a copy of GTAIV.
As to blood in Videogames, I don't mind it. But then, I'm twenty years old, and I'm sure when I have kids, I'll be locking Bioshock and Halo up in a cupboard 'till he's fourteen or so.