I don’t think it’s a big stretch to look to pop culture as a source of allegory. After all, the myths that we now study in college were originally everyday entertainments, spread by word-of-mouth and changing with each re-telling.
For my money, there are two answers to the question of why we don’t see allegory in video games:
First, people don’t find what they aren’t looking for. The amount of time spent analyzing literature in classrooms (and hell, on these Internets) dwarfs the amount of time spent analyzing the stories in games. The amount of time spent doing the latter approaches zero.
Second, for an allegory—”a story, poem, or picture that can be interpreted to reveal a hidden meaning, typically a moral or political one”—to be effective, it ought to be layman’s work to interpret the thing. If it’s too difficult to divine the meaning, you’re talking about a code instead. The nature of games—that their storylines are flexible—is at odds with allegory. You wind up with a house of mirrors built on shifting sand. At best, it becomes a Rorschach test.
I buy this, though, wholesale:
I don’t play a lot of games that remind me of man’s inhumanity to man or the way hegemony self-perpetuates. And they could. Hell, they should.
I’m just not sure “allegory” is the tool of construction we should be looking for.