There is nothing wrong with making tough guy characters, when they have some depth too them. But too often, especially with video games, characters are made out to be "badass" to a level where it is almost impossible to suspend disbelief, and they have very little else going for them. There is nothing wrong with a heartfelt tough guy. I mean, we have loved Superman for all these years, and he is pretty much invicible, but his character has always had a lot of emotion to him and was relatable, he never went around flaunting his toughness like a damn 2D WWF character (i.e. Oh yeah! I am so tough and awesome!). Wrestling (the fake Soap Opera-esque televised kind) is, IMHO, the ultimate redneck sport. You always see guys with freakin' mullets running around in WWF shirts with holes all in them.
Usually I use the term badass with a negative shallow connotation*. I don't see Master Chief and Arbiter, which are actually both relatively heartfelt characters, or what I have seen of the Mass Effect characters, being anything like 2D WWF like characters, but that is exactly how I see the guys from Gears of War and the new Spartans from Reach. Hopefully I will be wrong, because I'd really want to like Reach, it has just failed to impress me so far. I loved ODST, and would love to see Reach be just as impressive.
*growing up I had always been taller and broader shouldered than most of the other guys my age. I'd never really felt the need to prove myself, and had spent a lot of my adolescence shrugging off idiots who wanted to get in my face because they felt they had something to prove, and frankly I never cared who could take who. "No, I don't want to fight you. Yes, I am sure you'd win. You're right, yeah, I'm a total coward." usually became the best way out of those ridiculous situations. So when characters in fiction remind me of these brainless badass machismo types, I just can't relate in the slightest.