I'm loathe to discuss this, since I have been periodically lost within digital spaces, however, I definitely think there is merit above and beyond addiction and delusive behavior in things like MMOs, and video games in general.
I'd like to specifically address MMOs, since I have been enthralled with one for about the last four years. One of the things that became apparent over time was that objects would have value to me (and anyone else similarly leashed by the game), but to everyone else, level and gold and gear and whatever else had absolutely no value. In fact, the more in game value I possessed, the less real world value I had. This makes sense from the outside, but when I was inside, somehow the virtual value equaled any real world value (time) I had traded it for.
Now before I jump to conclusions and say that no one should ever believe in virtual goods, I'd like to point out that every currency in the world is virtual. Every service provided by a person that doesn't result in the creation of an object is virtual. Every social contract we uphold, every generalization, and every idea we have in our head is virtual.
The difference is that everything I mentioned above can be traded in the real world. I can trade my services to you, and you can give me cash, which I can then use to purchase a taco.
MMO value, on the other hand, cannot (easily) be traded in for real world value. I can't sell a character for cash without breaking the rules. I can't "work" at a task in the virtual world, and then recieve real world value for that service. That's why these spaces are limited to MMOGs. I can't take my orc shaman, grind out some gold, and then convert that gold into real currency.
In order for these digital spaces to make the transformation from valueless "games" to legitimate "worlds," then some sort of exchange rate must be introduced, and trade barriers must cease. Just as goods and services cross national lines, so too must commerce cross between the real world and the virtual world.
Until then, these places will be valueless distractions, and nothing more.