A lot of the counter arguments here have been that other shooters have portrayed Nazis/Red Devils and that's been ok, therefore this must be ok.
What if the counter is true, that those games weren't ok either? There is a part of me that understands where the discomfort is coming from. You may not have to agree with it, but you have to empathize to a non-gamer perspective, especially those who have a personal connection to the tragedies represented in these games. I remember a friend of mine was playing some WW2 game in front of his grandfather, doing the Normandy scene, and his grandfather had been there. Maybe he should have just said "C'mon gramps, its just a game!" Instead, he turned the game off, because he realized that it had some affect on his grandfather he didn't understand.
Maybe it's because most of the gamer generation hasn't been exposed to a really bad war. Some of us are old enough to remember Vietnam, but not many, and still fewer have actually served. Although.... every gamer I have met who has served loves CoD etc.
To me, what makes it have/not have value is how the topic is handled. I know a lot of people have said 'its just a game!' but that argument goes completely against what the producers of 7 days in Faluja said to try and keep that project alive. To them it was about trying to accurately recreate one of the most horrible battles American soldiers experienced in this war, in a way it was the kind of interactive media that will be integral to the next century. It was a memorial as much as it was a game.
Now, if everyone, including the producers, take what is a sensitive issue (if not for yourself than for others) and treats it with the roughshod grip that we often do, then I think a disservice will have been done to the gaming world. However, if a sincere attempt is made by the producers to capture the different elements (militarilly and otherwise) of this conflict, then you could have something really important.