I think that romances can add a lot to a good RPG, if they're well-done. Love is one of the strongest motivators of human behaviour, and I do find it odd when it's not even an option in a game that is strongly character-focused. If it's done poorly, then it runs the risk of ruining the suspension of disbelief.
I prefer it if the romance is not forced upon the player by the storyline, but some games do it well enough that I don't mind. The romance between "Tidus" and Yuna in Final Fantasy X, for example, worked very well and didn't feel that forced -- in my opinion. The romance between the Avatar and Raven in Ultima IX, on the other hand, did feel forced and intrusive and was rather poorly-done overall. "Squall" and Rinoa in Final Fantasy VIII didn't really work that well either, partly because "Squall" was a generally unlikable, whiny putz of a protagonist (are we done with the anti-hero fetish yet? PLEASE?)
The romances with Aerie, Jaheira, and Viconia in Baldur's Gate 2 were all well done, as were Carth and Bastila in Knights of the Old Republic and Nastassia in Ultima VII. The "romances" in Treasures of the Savage Frontier were rather stupid (and you didn't have any choice in the matter).
I don't agree with Avellone's stance on unrequited love. Just like the fascination with anti-heroes in modern games, the whole unrequited love thing is getting as cliched and stereotyped as the happy endings.
I don't agree with the ban on consummation either. It's a natural part of a romantic relationship, and if he has that big of an issue with it happening in the game (not explicitly, of course unless you want the dreaded AO rating), then I think it's his issues coming into play. It's not the be-all and end-all of a relationship, but a part of a developing romance, and it can have a rather important role in that part of the story. For example (non-game), the last half of the second season of Buffy the Vampire Slayer. That's "choices and consequences" right there, and the finale of that season is just as heart-breaking every time I see it as it was the first time. Something like that in a game, where the player actually has to make that decision, could be one of the most emotionally powerful moments ever to appear in a game. In this example, the consequences of not doing what she did and living "happily ever after" with your beloved while watching everybody else you care about die horribly would be a pretty chilling endgame.
(I'm not suggesting re-creating the same situation as in Buffy in a game, it's just an example)