Blood and gore simply increases the realism. When people slash at things they want to see it react how it normally which maybe ''sick and disgusting'' as it is real. Pretending cutting people doesn't do anything is delusional and much more sick and disgusting in my humble opinion.
I am not against toggleable blood but I really dont see it as necessary in a Mature game.
There are dozens of great games without blood and gore. The literally dozens of classic games without it trump the notion that it's somehow integral and shouldn't be able to turn off (which some of the other posters are claiming).
To think that some people would dismiss a classic game such as the Legend of Zelda: A Link to the Past all because it doesn't have "realistic" graphics and gore is kind of depressing. I'm playing a video game. That's the whole point, I'm not actually killing real people. If games were truly realistic with the horrors of killing and death most people would not kill in them. Actually some might still, which is on an entirely different level of disturbing.
As to the phobia comments, it's not just a "phobia." To many people blood and gore is simply disgusting, akin to watching characters use the bathroom (worse really). Should you have to use the bathroom and watch your character graphically do so? Should you have to clean up afterwards for the realism? That's the severity of graphic gore to some of us. Obviously blood splatter isn't that bad (to me at least), but I think it's a fair comparison since the "realism" card is being played. I suppose foes should soil themselves in fear too. Wouldn't that be oh so immersive?