: This is a bad example, because there exists CAD programs that aim to be as
: realistic looking as possible. What this does is free you up from having
: to use blocks. You can use curves, various 3D shapes, and any textures you
: want. If your goal is to build stuff, a CAD program offers you not only
: way more flexibility, but also much much more power.

Hey, Cody? You're talking to someone who is trained on two different CAD programs. I'm someone who spent three semesters learning how to use Solidworks, plus hours of going through other people's homework assignments correcting errors in exchange for free pizza. And my own creations with Solidworks are still crude, ugly models built mostly from extrusions, rotations, and chamfers. Custom textures are another ballpark in their own right, and compound curved surfaces are 90% witchcraft.

CAD programs are only toys for a select, highly trained few. They are not good games that can be picked up by anybody.

Second Life had a 3D object editor, but using it skillfully was out of the reach of a lot of players. Most places just turned to professionals and commissioned objects off of them.

: You could use blocks
: if you like, but why bother when you can use whatever shape you'd like?

Because 'whatever shape you'd like' is out of the reach for the casual player.
Because 'whatever shape you'd like' plays three kinds of Hell on simulations of water and lava flowing, which are fundamental mechanics of Minecraft.
Because 'whatever shape you'd like' would make most players give up and go play FTL when they can't get their art project to look just right, whereas blocks are abstract enough that players can focus on the different stages of designing, acquiring materials, and building a castle.
Because building objects is only a part of Minecraft's appeal. More players come for the exploration and the construction of huge castles guarded by fiendish traps, for which blocks suffice.

Space Engineers might be more your speed. I played the beta, and it seems like it takes Minecraft's "Let's build this" appeal and lets you do it with more varied parts (Slopes, engines, gravity generators). The drawback is a cluttered catalog mated to a clunky UI compounded by a distressing lack of spelunking.