Location based gaming hasn't really hit into PC gaming much yet, but I think it will due to the increasing prevalence of tablet gaming. Many tablet based titles are using location as a basic gameplay element and I think that's going to transition over to PC gaming, especially in certain genres like RTSs, and some RPGs...and especially as more and more titles are released that are non-platform specific.
Obviously you can't throw location on top of just any game and have it really add anything, but for games built around the concept it may be one of those areas with great potential to to add immersion that most titles lack.
I've played some of the earlier tablet based location oriented games. The RPGs are okay, but the RTSs are really intriguing. The ability to claim territory around where you live, or where you grew up, and defend it from other players, fight amongst yourselves to determine who "owns" that real work territory is a real hook.
I've also played many of the current crop of browser based RTSs like Evony, Travian, etc...and the territory you fight over in those games is just completely generic, grid based territory...there is no personal tie to the location where those games place you.
Am I completely wrong in thinking that real world location can/will add a layer of personalization that would be very enticing to compete with other players over?