Stage plays, movies are a group effort as well, often costing more to produce than video games.
Books can have multiple authors, movies and games can be made by a single person.

My imagination / dreams can replicate life. The human mind is unmatched as a delivery medium. And art is all about expressing your imagination. Games make it possible to life fantasies, just as role playing can but with a lot less effort (for the player).

But yes, who knows where simulations will be in 70 years. It will still be an expression of people's imagination.

Video games have very big limits, they only engage 2 of your senses, making tiny strides with touch (haptic feedback).
We still have a long way to go before any medium can replicate 'dreams'

But I'm curious to see where we are in 50 (if I live that long)

Dreams aren't an artistic medium but if you've ever Lucid dreamed you'll know that they are unstable as all fuck. AI video is now more cohesive than dreams. Gaming simulations could create realities as stable and detailed as out own. 

My argument is not that it cannot be art because it expires, but that it is worse art because of it.

I have played a fair amount of indie games, I just highlighted some of the better examples in my opinion. I would say that even among indie games there is a fair bit of repetitive game design too.

Minecraft is art in the same way Lego is art, that is not at all. Though some might use it as a tool to create art.

Dreams created this for example

AI doesn't create, it copies and combines.

And why strife for stability, a Salvador Dali world to explore would be amazing :)

True, it isn't fair to point at the bad games. But I think, even among the games that are considered masterpieces (also among those I would consider as such), a lot of them either lack artistic merrit in general or the interactivety isn't what provides the artistic merrit.

False. And once you start saying that one art is better, you inevitably say that other arts are inferior or even more strongly, worthless. Every art gives something to us. Every art reaches a part of our soul and gives meaning in a fresh and new way (hopefully).

And games are more of an applied art that uses skills gained from other arts in order to make a finished product. So it's something of a combination.

I don't know if that means that applied arts are superior but i want to say no. Art for arts sake is the highest goal, not the enjoyment that it brings.

I wouldn't say that any art form is better than another. But if I had to choose between my consoles and my ukulele, I would take the latter. But that's just me and I prefer to just keep both. Art is a very subjective thing and there is no thing as "better" or "worse". In fact, I love that there are so many niches, even if I don't like each and every one of them. It's all about diversity.

So games can be all things, but generally games aren't great enough to do all things well. There are amazing games with incredibly great stories and catchy tunes, I'll admit. The best of games can be incredibly well rounded experiences, but as a general whole I think that music and books are more impactful. Taking a look at Bob Dylan for his influence of the sociopolitical landscape at the time or the famous 1984 by George Orwell are great ways to show off the impact of those two mediums. They just carry a different weight I feel. 

You got an interesting perspective. Two things come to mind:

1) How interactivity does or does not provide artistic merit is difficult to gauge, because artistic merit is difficult to gauge. One could argue that the combat in the greek GoW games is mostly the same and has nothing much to do with the story. Or it is a way to let the player experience first hand how Kratos cannot escape the neverending violence, perpetuating the cycle himself. You could argue that the gameplay in The Witcher 3 does not change much between hour 1 and hour 40. But you could also argue that it is not about gameplay variablility, but about the decisions if and where the player directs Geralts violence towards. This decision shapes many quests and their stories.

There is also this concept of emergent storytelling: "I jumped off a ledge and bonked a npc on the head" - that is hardly a compelling story... -when you tell it. But when you experience it first hand, doing it yourself via approximation through button presses, it becomes a very gripping, thrilling story to play through. In this sense interactivity provides an almost endless pool of compelling stories with artistic merit. They just don't translate well to writing (story telling in books).

2) Interactivity, and the storytelling merits coming from it, are not confined to only hitting enemies. It is also walking through an area, or panning the camera. It is even not to interact while you had the potential to, like not shooting an enemy, or choosing a non lethal approach in stealth games.

Apart from standard mechanics for the whole game, games often have special moments of interactivity that might carry special artistic merit. God of War 1 comes to mind, when Kratos has to hug his family to transfer HP to them and protect them. Or in Brothers, when you have to use the controls from one brother to suddenly direct the other, overcoming his fears. Holding Yordas hand in ICO is even a mechanic throughout the whole game. I think there are many more examples like these.

Fighting and exploration is much more impactful on me from fantasy and sci-fi books, like Brandon Sorenson, Tad Williams and Peter F Hamilton can describe them. Games never come close to that. Books can literally make my heart pound while reading, can make me feel fear especially while describing claustrophobic sections (which have no impact on me in movies nor VR) and make me tear up or laugh out loud.

Emergent story telling is great but the undirected nature gives it little flow nor purpose. At most I feel like a cartographer in games, mapping out the play area (in my head or opening up the in game map). Over the decades I've become less and less interested in the actual combat, and my emergent 'stories' are now mostly about exploration of the world. My TotK / BotW memories are all about world exploration. Same for Dark Souls, the world in the art piece that sticks with me. The combat, I just remember Ornstein and Smough being a pita due to player invasions. Meanwhile futuristic battles describe by Peter F Hamilton, amazing what he can conjure up in your mind.

So yes interactivity to me is mostly exploring the game worlds, like exploring a museum / park / nature area.

The extra mechanics are cool but despite having played GoW1, I don't remember that at all, made no impact. I do remember Brother's mechanic but it didn't feel emotional at the time. It was as simple as press X to jump in my mind. The story made the impact, the 'mechanic' just felt like a clever trick like changing controller ports in MGS. In IcO it wasn't the hand holding mechanic that made me care for Yorda, it was the repetitive threat and having to run back to defend her over and over.

So no, these interactions are not displaying any artistic merrit to me. Controls are still a filter limiting how we can interact with the virtual worlds. The only game I felt where the controls had artistic merrit is Pixeljunk 3AM, where you use the move controllers to create music with different effects. Basically turning the move controllers into electronic instruments. Music is powerful!