Actual immersion, the kind where the game really sucks you in to the point where you sometimes almost forget you're playing a game, is fucking awesome and always will be. It's achieved through making the game world believable (verisimilitude), as well as a great attention to detail. I still think Thief 1 is the best horror game ever made, despite the fact that it isn't even a horror game, because it immerses you so fully into the experience that it's actually scary just crouching in the dark, listening to the clanking chains of the skeleton walking nearby. If the gaming industry as a whole used "immersion" to only talk about that kind of experience, the word would have only positive connotations, even here.
Not only that, but Thief makes you feel anguish even in human-populated areas with the simple fact that you are somewhere you don't belong.