The Escapist Magazine published, some time ago, an article by Patrick Dugan, from King Lud IC. It is called 'Reimagining Challenge', and it approaches several aspects of a possible future for game design and the role of "challenge" within it.
The article, very sympathetic towards non-games and non-gamers, makes several good points, some of which I would like to comment.
It opens with Dugan attributing the state of the game industry to gamers:"It's gamers who are reserving the Xbox 360 months before they could hope to secure one of the pricey units (...) The game industry is the way it is because its audience has voiced its particular demands in a powerful way, keeping the status quo."
While I agree that gamers have their share of responsibility, I wouldn't blame them for the whole situation: few players in the industry (and we have to congratulate Nintendo for that) really try to bring new audiences to videogames. This situation is only changing now, mainly for market issues rather than artistic ones. That could take the industry to "abandon the "gamer" market altogether in favor of a much wider demographic", as Dugan puts it, even if I think that the building of a new audience should occur in parallel to the maintenance of the existing one. In an optimistic scenario, they could converge.
A parenthesis here: I think that controllers favouring the body movement, such as the Eye Toy and even the Revolution controller, could help to increase game popularity within the two spheres: new kinds of games and non-games for non-gamers and new takes on existing genres for the traditional gamer, who could be interested in playing, for instance, an FPS with his body instead of a joystick. In fact, without the barrier of the joystick, non-gamers could actually be attracted to conventional games.
Moving from this topic to the uses of challenge in game design, Dugan argues that "it's likely the same principles which allow challenge to be created in closed, ludic systems can be effective in open, paidic systems, and anywhere between." The key for that, I believe, is to make the most of interaction and interfaces. Elektroplancton could be a puzzle game with very low extra effort: it was just a matter of transforming each activity into a "reproduce the melody" mini-game. Still, the experience of just playing around with sounds is already so interesting that there is no necessity for the player to pursue a related goal.
Other factors that could be crucial are investing in the player's creativity and curiosity (build interesting patterns, not only recognise and solve them) and support the player's sense of mimicry (not only in a literal sense, where aforementioned peripherals would have an advantage, but also in his sense of control over the simulation taking place and its response to him).
In the final part of the article, Dugan presents an answer to the question he proposed. "We need to stop thinking of challenges as obstacles to be mastered, and start thinking of challenges as realities to negotiate. Social dynamics are the toys to charm society."
The request for a bridge between challenging games and social interactions echoes, among others, Chris Crawford ("games should be about people, not things") and Gonzalo Frasca ("grandmothers are cooler than trolls").
Personally, I don't think all games should necessarily be about people, as long they as they are about the player, helping him to express himself or experience something new. However, it is about time games about social dynamics are made more often and made popular. Façade was a step in that direction. Storytron could be another. Activism games (and activism is all about challenging existing social dynamics) are also part of this movement. Such games (and several other cases) could take the medium to a new positioning within the cultural industries, and deal with a wider diversity of subjects. I think gamers, traditional or not, could enjoy it.