I couldn’t agree more with your points about Gary Gygax. I think it’s also worth noting that the game he created Dungeons and Dragons–in its original form–has a strong, libertarian, almost Randian, theme. Although the game can now be played in any number of settings, the original “world” that Gygax created, Greyhawk encourages players to take the role of rugged individualists, fight the corrupt mages who rule the land, go forth to slay monsters, and gather lots of treasure for themselves. Of course, the sort of moral self-assuredness Rand liked so much pretty easy when the bad guys are fire breathing dragons, evil wizards, and ogres. (Not to mention such only-in-D&D monsters like “black pudding.”)
The newer versions of the game and the newer settings, which I haven’t really played, move away from this model. And they’re probably better games for it. But, in so doing they also give something up.