David Hayward brings up some great points about the potential for system fatigue in systems that employ game mechanics. Indeed, if we lived in the game apocalypse world envisioned by Jesse Schell, it all might be a bit boring in the long run.
That said, I don't think it's really a question of do we use game mechanics in whatever system we design. Rather, how is it that we facilitate flow in all experiences?
an old post of mine on flow