In my own opinion instructional designers should be required to make what they are teaching relevant and useful to their students now or in the future, but they should not have to entertain students beyond that. Maybe your opinion is different, but consider that in order for our instruction to compete with other things digital natives do, it would have to meet the highest quality standards of a video game production. This is doable, but only with a lot of time and money.
A common complaint among digital natives is that they are bored, but what this really means is that they are not stimulated as much as they could be when they are doing something more stimulating. Boredom is relative. Instructional Technology often tries to cater to digital natives' needs by creating instruction that is in video games, or other digital media that they are used to. While these efforts are commendable, I wonder if they are somewhat misguided because ultimately school must help get the next generation ready to work in meaningful jobs.
I am not saying that all jobs are boring, but I am saying that most jobs now require workers to stick to a task that digital natives would consider boring. Life is full of "boring" things that have to be done. While video games teach problem solving skills and critical thinking, the very problems that are being solved are more often than not very different than real life tasks that students will do in the future. Do these problem solving and critical thinking skills learned in a very exciting environment actually transfer to "boring" or real-life tasks that people do in their job? I don't know, but I think that this is what we should be asking in digital games based learning. Perhaps instructional design efforts should be made to help people become creative enough to take care of their own boredom problems. Or maybe "paying-attention" skills need to be the focus of some instruction to digital natives.
Brett Shelton discusses using a commercial game for education in his book, The Design and Use of Simulation Computer Games in Education. He mentions that something called unintentional learning happens in these types of games, which is not useful from a design standpoint (2007, p. 108). I have not read any studies that prove that general skills learned from video games (like problem-solving and critical thinking) transfer to any real-world situation (perhaps you have). But I think the best efforts of digital game based learning teach specific skills that are relevant to real-life.
In an excellent article entitled Game-Based Learning: A Different Perspective, Karl Royle explains that games and education have been and are still largely mutually exclusive (2008). But Royle proposes a model of instruction that comes from the field of instructional technology that will allow for the blending of these, problem-based learning. Royle explains that problem-based learning in a video game would require the learner to complete a complex, real-world and authentic task by applying rote information found in the game (2008). In other words, learners would be able to learn and apply useful information to a unique real-world and relevant task.
This is the type of approach that I see being useful from an instructional design standpoint. It instructs and makes use of only relevant media. It has been proven that media does not influence learning through thousands of no significant difference studies. Therefore any irrelevant media added to instruction will not make any difference in real learning and can often be distracting. Many video games do this. In contrast, there have been many great efforts to create instructional games using relevant, real-world tasks and I think these are the only useful ones for education. After all, we are not here to entertain students.
Royle, K. (2008). Game-Based Learning: A Different Perspective. Innovate, 4(4).
Shelton (2007). Designing Educational Games for Activity-Goal Alignment. In Shelton, B. E., & Wiley, D. A. (2007). The Design and Use of Simulation Computer Games in Education (p. 316). Sense Publishers.