I don't give a flying fuck if there's blood or not. Personally, of course.
The problem is when games sort of add excessive blood and gore as a pretention to maturity. Manhunt is a good and bad example for this. I mean, the game is basically focused on beating the bells out of people so you expect some graphic scenes, but it's all ust a bit over the top. So much so that the violence becomes dull and tedious. Then you take a game like Condemned, a similar premise, but it's not like "here's some stuff, kill those guys", you feel more like a part of the experience, if you will. You're the one hearing those fast guys and thinking "shit, I'll grab this faster weapon" and you're the one who screams your head off at the mannequins (seriously, never been so freaked out in my life).
Basically, blood and violence is fine and dandy, if you handle it well. Most people can't but apparently Sega can? Crazy times we live in.