I've seen video gamey used derogatorily on the board fairly often Diabloesque is another common comparison.
Now, myself, I think Diablo II would make a pretty decent D&D campaign as long as you filed the serial numbers off, added a few more options, and toned down the random combats to be suitable for a multiplayer role-playing game rather than a real-time, top-down strategic shooter. The majority of the quests and settings as well as the progression, however, would make for a good game.
As for the justifiable use of the term, I think it refers to a play style--not necessarily hack and slash, but rather like the beginning adventurers you can subcontract one of the Baldur's Gate II Throne of Bhaal quests to, an attitude that expects things to always be salvagable, and wants to save the game and try every apparent option to see what happens if you do. (For those who don't remember or haven't played the game, your party discovers some wannabe adventurers in the lair of one of the villains and, after casting stone to flesh on them, sends them to get some stuff. They defeat the kobolds and come back. When they get back, they've made a couple levels and the wizard can cast two magic missiles, so they decide to try and kill the party. When they fail, the screen goes blank, they "load" the game and give you the stuff). It's the kind of logic that leads to killing Drizz't for his scimitars in the original Baldur's Gate. One of my friends played Neverwinter Nights the same way: check every quest ending to see what gave him the best stuff and make sure to give enough gold to beggars to keep his alignment "good." (IIRC, it came back to bite him in the end because he always did the short term evaluation and if a particular resolution method meant losing xp and gold immediately but pointed to a longer-term reward, he would miss it). In normal D&D without save games, I don't see how that would really apply.
However, I do really dislike the "rest after every fight so we're at full power" style which is more popular in video games because events are generally scripted based on location rather than in-game time progression. I don't think that's specific to video games, however, and it certainly isn't a universal feature of them. (In fact, I tend to have my NwN and BG II PCs rest about as often as I would pen and paper PCs).