It's not insecurity - I seriously worry about the kids. Sure it's just a game. I own Rock Band, and actually got it to get one of my kids started on drums, and my other kid singing. They're too busy running around outside to play video games. Ah well
I just have way too much experience teaching kids who might otherwise spend time learning guitar, but waste their time on a stupid game. I don't blame the game companies - I wish I was making that money. It's just unfortunate that this game has exactly what it takes to lure kids into very unproductive behavior; it's quite quick and easy to play along in the beginning, it's competitive, and it makes them feel important.
I have not met one kid who played Guitar Hero who did not wish they could do as well on a real guitar. But still they play the game instead. Caveat emptor...
Again, not blaming the game. And there's no way to make a kid practice when they don't want to. It's just sad. If there were a way to hook a real guitar into a game like that, it would probably spawn a horde of 11-year-old Steve Vais. Maybe next year...