I have worked on two really quite violent computer games. Decapitaion, removal of limbs, grenades, chainsaws, torture, blood - you name it. One sold moderately well, and the other sold by the absolute bucketload.
I don't lie awake at night worried about the moral consequences of making violent games, especially not when both of those games were rated "M FOR MATURE", or 18 Cert (depending on country). Neither game was in any way shape or form intended for children - any shop that sells those games to children should be shut down and sued, and any parent idiotic enough to buy those games for their unsupervised kid should have their children taken off them.
Games, like films, music and even books have an age that they are appropriate for, and ages that they are not appropriate for. Any parent who believes that a child should play an M/18 game, but not watch The Sopranos, or listen to 'Explicit Lyric' music, or read something like Lady Chatterly's Lovers (sp) or buy Playboy, is a hypocrite and should pay attention to what they let their children touch.
[edit] Oops - I didn't even answer the question. *Doh!* Right - anyway, as you can tell, I didn't turn down work on violent games. Unfortunately, work in the games industry isn't easy to get, especially for those just breaking into the industry. While it may sound like an easy way out, it's often publishers that decide the tone of the game that you'll be making (or indeed the genre or liscence) and believe me that if people didn't buy violent games, then publishers wouldn't publish a single one. We're not 'innocent' of making games, and we can't just blame everyone but ourselves, but violent games sell, we certify them through a certification board (which is quite strict, actually) and we don't try to pimp our games to children. Personally, I go where the work is - I can't afford not to. I'd like to work on happy sunny games (I'm a happy sunny person
), but that's not what I have the option to do right now.