I tend to agree, except for your last point, and it being a strength. I don't believe a good game necessarily has to have an implied setting. If anything, I think 4e overshot the mark in prescribing flavor. IMO, its a big part of the strong reactions that 4e engendered.
You're missing the point. Games don't choose whether they have an implied setting or not, they just choose what that implied setting is (unless the game was designed badly, in which case the implied setting exists without thought and probably hurts the tone of the game).
For example, Chess has an implied setting, even if you change the names for all of the pieces. Half the pieces are weak, disposable grunts that have a hope to become better pieces. Many pieces are better, and one among them is far and away the most powerful of all. The final piece is weak, but must be protected at all costs. These relationships imply a story in a very direct way, and any attempt to give narrative meaning to Chess absolutely must take that implied story into account. People would laugh at a narrative description of Chess that portrayed the Queen as a timidly and frail figure who is a helpless damsel in distress, after all.
Also, you do realize that your post is the antithesis of the "4e can do anything, just refluff it." argument?
...huh?
I didn't realize that this was an edition war thread. I also didn't realize that I am somehow obligated to defend the points of view that are expressed by other people. Oh well, if that's the case, I may as well play along.
"Mechanics have a strong implied story" and "you can refluff mechanics" are not incompatible in the least. It means that various attempts at refluffing are more appropriate than others, but it is still perfectly possible. I mean, the Warden probably would work great as a representation of a Japanese-style transforming superhero, even if it wouldn't work so well for a historical Roman Legionnaire. Similarly, you could easily refluff a dragon into some kind of rampaging robotic weapon just fine, though reskinning it into a harmless fluffy rabbit wouldn't be quite as easy (unless you like vorpal bunnies the size of a bus, which is totally okay too).
In other words, what you think is a contradiction is, in fact, no such thing.