Honestly I feel like the mainstream games industry is pretty chaste. A large part of the audience is younger, and it is their parents who are buying the games. You want something to be engaging, maybe even edgy, but not so edgy that mom and dad wouldn't want little johnny playing it.
Part of the equation is that combat is interesting to simulate. It has clear rules ( live or die ), a lot of different ways you can tweak the game design to differentiate ( swords vs guns vs spells vs karate ).
The most popular games are NOT that violent. They simulate combat, but the draw is the competition created by the simulation, not the blood and guts. I can't name a game where "chopping people up" is the primary goal. I'm sure it exists, but I would find it dishonesty to disparage an entire medium because of the work of some niche game developer.
I didn't grow up during a time when you could go out and wander the streets all day and your parents would be OK with that. You had to be home. Having friends over and competing over video games was a great way to pass the time. The game we played the most? Super Smash Bros. Rated E, 0 realistic simulations of violence, about as bad as any slapstick film.