I'm somewhat confused as to what it is we're all talking about. Are we talking about metagaming, or powergaming (metagaming being using player knowledge and creative stats to give edges to characters, powergaming being, well, building a character towards the singular goal of in-game power to a ridiculous degree)
In small groups, meta-gaming can be bad. I remember last time I DMed a 2nd edition D&D game. This was back in my frat days and most of the guys just wanted to play for fun. One guy was a metagamer and took advantage of my laxity to pull out every rule book available and create a first level fighter capable of churning through 20 gobs like he was the proverbial hot knife. It ruined the game for everyone else.
Metagamers can ruin the game in several ways. The first is the above-mentioned example, wherein they can just suck all the fun out by being the uber-power house. Combat is a significant portion of most game systems and totally dominating combat ruins the significant potion for the other players.
To select another obvious example, there's the rules-lawyer aspect. The metagamer knows all the rules and thus is willing to argue with the DM into infinity in every situation. Where's the fun in watching some asshole attempt to browbeat another asshole into submission? It's worse if your DM is cool and wants to give the group the benefit of the dice; the metagamer becomes a god. Worse yet, the DM shuts down and rule as precisely by the book as possible.
If you play for fun (and I usually do), the meta-gamer just plain ruins it. He criticizes your choices for being suboptimal (by the by, the metagamer's usually a dude). He pulls the focus of every encounter, combat or non. He whines. He agitates. He's a stereotype.
The metagamer isn't a problem because he's a stereotype (most of us are stereotypes of one kind or another). He's a stereotype because he's a problem.
This. The group that I ran with in high school was full of meta/powergamers, and it sucked. Since there wasn't a very large pool of potential players to pick from, I was stuck with them, and invariably by the time our D&D characters hit level 4 they were either engaged in activities that were generally reserved for characters in their late teen / epic levels (constructing keeps, encountering God avatars, running entire nations) or we weren't playing at all, because the metagamers were struggling against the iron hand of the DM so hard that it just stopped being fun.
The problem with metagaming is all about balance. Metagamers unerringly gravitate towards the exotic and powerful, and as a general rule (with D&D, anyway) the more exotic and powerful something is, the harder it is to balance. Just play any epic level D&D game, tabletop or otherwise. Players are so powerful the DM can't really do anything against them without being cheap (say, a horde of vampiric dragons) or cheap but creative (the Hunger in Mask of the Betrayer) For this reason, most avid roleplayers I know don't play games past level 16 or so. It just becomes a chore.
With metagamers, those problems with epic levels tend to bleed into the lower levels as well. If you're playing 3.5 D&D, for example, what most DMs do is restrict starting races and classes to a few basic books, usually just the PHP, and then only allowing a small number of prestige classes per base class.
Thinking of it in terms of "I've got this sword, what's the difference between using it because it's +2 and using it because it's better against goblins?" doesn't go far enough. The problem with metagaming, as it relates specifically to D&D, at least, is that if you look at it, a lot these things don't really make sense from a roleplaying perspective, and the blame lies at the feet of Wizards of the Coast. I should preface this by saying (and really, I think this gets to the heart of the matter) that if you're looking for actually roleplaying, you probably shouldn't be playing D&D. D&D is a combat simulation game with a myriad of player options and some allowance for light roleplaying mainly used as ligamentation between and preparation for fights. It is not actually built for roleplaying. If it's going to be discredited it should be because it puts on all these airs of depth in denial of its simple, retarded, WoW-y heart. WoW is D&D cooked into crystal form.
An example of how metagaming is encouraged is the implementation of prestige classes. They all have prerequisite stats and requirements, all of which require many levels (and many play hours) to acquire. The great majority of the characters that I make for 3.5 are started
with a specific prestige class in mind. Characters do not take prestige classes as a function of their actions in the gameworld but as a function of abstractions and numbers that never really factor into the game. Say I want to become a certain prestige class that requires the feat "skill focus: spellcraft", which as feats go is pretty negligible. When the time comes that I can take that feat, I could also take any number of feats that could be much more useful to my character. But I take the lesser feat, not because it's useful to me now, because it isn't, it never really will be, but because 5 or 6 levels and many weeks of play later it will unlock the door to a more powerful prestige class. From a perspective of roleplaying, how does that make sense? It doesn't. It's the worst sort of metagaming, but the game requires it if I'm to have that class.
Roleplaying is dying out, slowly but surely, as they become more and more adherent to video game poindexterism, and it's sad. For all the odiousness of the geeks who play White Wolf games and attend ren faires, I'd take them any day over your WoW geek. It's like the difference between Afrika Bambaataa and Soulja Boy.
