From reading the posts before this one, I can tell I'm a bit in over my head to comment on vgm in comparison to non-vgm music, but I'd like to note some differences between status quo music that could affect it's status:
It's based on a related experience, which means a decent song for a good game scene improves slightly to the listener(as has already been noted)
It's limited to the sounds that can be produced on a given type of hardware, which prevents someone from using a huge range of instruments, or locks them into a selection of them on semi-old hardware. This is characteristic, in my opinion. Modern hardware loses this aspect, as well as a certain degree of it's uniqueness when artists have no direct challenge to their creativity besides "Encode it in lower quality", or "Get rid of a big song".
On a related note, the difference in hardware abilities creates a type of sound you'd be hard pressed to get any way but electronically, and getting composers for a game is the best method I can think of for paying authors to compose such music for limited musical systems. Sheer output tends to provide success in some form for any given person's view of 'good'.
The songs are usually designed to loop, which tends to reduce the intro and outro strength(musically), unless the intro only plays once.
There's a greater acceptance(sometimes downright expectation) of writing different music for the same melody(Banjo-Kazooie, Mario series)
A recent development in it's favor: There's no RIAA battle(that I know of), nor Anti-RIAA pundits throwing insults or distracting one from the enjoyment of listening to the music.
I'm not expecting any strong response to this, but I thought it was pertinent to the discussion.