You're just wrong on so many levels...I'll try to point out a few things.Why is this motion blur abomination becoming popular with video game makers? Motion blur only occurs with film cameras operating at fairly low frame rates (24 fps). I'm playing a video game that has no film, no grain, and no "exposure" time to thus get "blurred", but why are they blurring my gaming experience?
Your eyes don't see motion blur because your eyes follow the action quite quickly AND your brain accounts for any missing or obscured details not seen. Eyes jump, they don't pan. Try it, look from the left to right and try and force yourself to "pan". It won't happen. Your eyes jump from key focal points to the next. There is no motion blur at all. Motion blur is only a result of a 80+ year old technology.
Motion blur is not natural and is a bit disconcerting while playing a modern video game. I get the feeling that it's just another bunch of challenging, but useless, "eye candy" game makers use just to say their game (or engine) does this and the other doesn't.
Don't ask me about "depth of field" effects either. A similar argument can be made against that abomination too. Hint: camera's have smaller depth of field than your eyes (someone with 20/20 vision). Which means the blurring of "unfocused-on" details is quite minimal compared to a typical camera. The director would not allow such a distraction from the action at hand, in a movie.
Now, yes, your eyes generally lock onto objects - they don't pan in a smooth way like a camera would - which is why the Image Motion Blur when you move the camera really fast IS unnatural, BUT...If you look at anything and an object moves through your field of view, you'll see it blurred. There's no maybe about it. Anything moving fast will look like a blur to human eyes, therefore Object Motion Blur is indeed realistic, and if it weren't used in movies, anything 3D that moves would always look fake right away.
Now, depth of field works too, and directors use it all the time. When a camera's behind a person, but focuses on a person 10 feet away because they're the one talking, the camera will blur whatever's close to it. So yes, directors would allow it and use it all the time. Games also tend to use it during cinematics (best time to use it) and when you zoom in with weapons. Obviousely if you ALWAYS blurred the background (like in Hellgate), it would look unrealistic, since the game can't know what your eyes Want to focus on in the first place. That doesn't mean DOF effects are always bad and unrealistic. Screenshots from games with proper post-effects (DOF, motion blur, glows, etc.) will always look more realistic than screenshots without those effects. In motion, the game simply can't know what your eyes are trying to look at, so DOF effects won't always be perfect.
Motion blur though, per object, is definitely always good, although slow to process so it hasn't been used properly so far (Crysis and Hellgate are the games closest to using it well). The way GoW and TF2 used it it's unrealistic and pointless, since fast-moving objects are always crystal clear and they're never like that in real life unless your eyes follow them.