Lens flares in games were always stupid, because they imply that you're looking at the scene through a camera, which breaks the immersion. I mean, they might as well also have a boom mike occasionally pop in from the top of the screen while they're at it.
I absolutely agree with you—but I think the same about lens flares in cinema, and given how entrenched they are in that realm, I'd say the rest of the world disagrees.
Now, yes, unlike video games, movies are in fact (usually) filmed with cameras. However, lens flares are still an artifact—they don't exist in human vision, and we know how to get rid of them. We just choose not to.
Don't give them any ideas! Actually I can see that being funny as an easter egg in CS or something.
Also, speaking as someone who wears glasses and has a bit of astigmatism, flares/haloes around lights aren't necessarily stupid or unrealistic (although the classic TV camera lens flare, admittedly not so defensible).
