I certainly get the feel that, on ENworld, this is the widely-accepted default approach to RPGing. Discussions, for example, about scaling challenges, or adversarial GMing, or what counts as a meaningful choice as opposed to a railroad, tend to assume that this is how the game is being played.
I think that a conflation of challenge-based and simulationist is the usual assumption, but that goes rather wider than ENworld, in my estimation.
What I am calling "values" play is, in Forge terms, narrativism. In D&D 4e, as I play it, the narrativist agenda is supported by exploration of character and situation, with the setting as a backdrop providing (to borrow a phrase from Mercurius) "vibe and atmosphere".
While I can see a methodology that could be used to play it this way, I don't think I would describe 4E as really "supporting" Nar play because it has no mechanisms for the non-DM players to directly coordinate or design so as to address premise/theme. The drive to challenge-based caused by xp/level is likely to be less troublesome than with exploration-based play, though, and a DM-led theme selection (by trial and error, or through discussion, if the group is savvy/mature enough) could work, I can see that.
I think the other main way the 4e could be played is as high concept (genre) simulation - but because (as has been frequently observed) 4e's mechanics don't always bring the fiction into the foreground if the GM and players aren't active in doing so, in my view playing 4e as an exploration game runs the risk of degenerating into "mere dice rolling".
Not only that, but if you keep the 'xp for killing stuff' mechanism then challenge-based will forever creep in as players are driven by the desire for more toys and goodies.
For the reasons I already stated I don't think that 4e, as written, lends itself especially well to challenge play (not that it couldn't be tweaked, of course, as LostSoul has done).
I don't agree - I thin all the elements for a good challenge-based game are there, with a couple of fairly small issues.
Remember that gambling is a form of "step on up". The challenge does not have to be one of skill alone, or even at all. And the challenge is an invitation, not a demand; if the players have no choice about stepping up to the challenge then I think you may be heading into some form of narrativist or theme-based territory (how long before the players react to the outrage being perpetrated - and how will they respond?).
The main issue with 4E then is the explicit framing of the challenge. A single encounter is usually a pretty minor challenge - a win is expected. But that fits, because the players should be the ones deciding just "how far to step" in the "step on up" - they choose the 'danger level' through how much they take on between extended rests in almost a similar way to 1E's choosing what level of the dungeon to go down to. What is missing are more rewards for racking up that danger level instead of resorting to the "five minute workday". Individual games can do this through the scenario context - forcing the pace a bit by having prisoners to rescue, etc. - but how to do this is not well expounded in or supported by the printed material. I am probably lucky in that I have players who will push through anyway, mainly because it's more fun that way!