I wholeheartedly agree with you, Stacey. I have no idea why that should be an unpopular opinion, but in some circles, it is.
As you mentioned, "video game" simply describes the creative medium, much like "book" or "music." It implies nothing about the content, quality or ambitions of that creative work.
If I tell you that I read a book, it means nothing. It could be a work of great artistry. Or a "nonfiction" work full of misinformation. Or a dry, witty satire, a collection of crossword puzzles, a trashy romance, a silly irreverent comedy, an academic text, etc...
Video games are no different, especially nowadays. In their present form of maturation, they've proven a legitimate art form capable of producing art as great as the finest paintings, operas, novels, etc...