Castranova quite reasonably predicts that we should expect these games to become more fun over time, and that we should therefore also expect people to want to spend more and more time in them. He sees this as a desirable outcome--people get to pretend to be and do whatever they want, and it might even force the real-world to be a bit more fun, too (insofar as the real world will be competing for the attentions of people, and will have to step it up!).
What's interesting to me is how precisely opposite this to most previous predictions of how such an exodus would turn out. In the original Star Trek pilot (for the original series), "The Cage" (later edited and released later in the show's run as "The Menagerie"), Captain Pike (who preceded Kirk as the captain of the Enterprise) discovers a planet inhabited by aliens who can use powers of illusion to make things appear as they wish. It is suggested that the populace became so interested in illusions that they lost interest in everything else, and the population declined. Eventually Pike and a human survivor of a crashed ship decide to stay on the planet, where horrible injuries they have sustained can be imagined away. In this sense the episode's message is mixed: the humans choose the illusion over reality, and are happy, whereas it resulted in the downfall of the aliens. You can watch the remastered "Menagerie" version of the episode in HD at CBS's site.
In The Matrix (the original film, of course--as far as I'm concerned, the sequels do not exist), a character betrays his friends so that he can be put back into the imaginary, simulated world, where his memories of the real world will be erased, and he will be put in a position of power. He wants to live an illusion, although interestingly, he doesn't want to remember that it is an illusion. We are meant by the filmmakers to think poorly of this decision, and not just because he betrays his friends. They also suggest that the human brain would not accept an illusion that was too happy, as we would consider it unrealistic.
In Anarchy, State, and Utopia, Robert Nozick proposes a thought experiment, with the goal of determining whether or not pleasure is the most important thing to humans. Suppose you had a machine that could reproduce whatever experience you wanted. You could live in it for the rest of your life, having everything just as you wished. The machine could even directly stimulate your brain to make you happy. Would you choose it? It seems obvious to Nozick that no one would choose it--that the experience would be hollow or meaningless in some sense. We want to do things, not pretend to do them.
Castranova might disagree. MMORPGs (and some other video games) are the closest thing we have to such an experience machine, and people are moving to these imaginary worlds in droves. Will such experience machines lead to the downfall of humanity? I would guess no--our lives will just get a lot more enjoyable. Unfortunately, living happy lives of our choosing inside machines designed to please us probably doesn't make for good stories, so don't expect to see any movies based on that any time soon.