Because we like candy, and because she's German and the cover of the out-of-place box on the shelf promised a Hexenhaus, my girlfriend and I picked up a gingerbread house construction kit at the grocery store today. On the walk home she mentioned the resemblance between the cover of the box and Little Big Planet's art style.
The appeal of LBP and a gingerbread house (and some other toys, like Lego or Meccano) are much the same. The end product is something you really like - a video game, fancy candy, or a pirate-themed dollhouse - but it's even more fun because you've got some creative investment in it yourself.
It's a tricky balance thought. If you make something like Garry's Mod you get something technically impressive but without a lot of mass appeal. Garry's Mod is a fun physics playground but there aren't that many people that can take a raw physics playground and have long-term fun in it, let alone make a fun result for others. If you offer people a box of eggs, sugar, and ginger and see what they can do you'll probably get some nice cookies, but the number of people that'll make a great house is small, and the ones that can do it probably bought their own ingredients already. Given a box of generic primary color Legos with no instructions some people will do amazing things, but most will have more fun and make more fun things given a pre-built parapet or spaceship shell.
It's also easy to fail in the other direction. In Dungeon Maker: Hunting Ground it was really fun to build out my dungeon, but then playing through it was some of the worst grindy dungeon crawling I've done in years. Fighter Maker videos are a perennial Internet favorite, but watching crotch-punches for a minute an a half is all the enjoyment you're going to get out of hours spent creating your fighters. It's like building a gingerbread house only to find it actually tastes like cardboard. And no one wants to get a Lego post office when you could play with whatever a wall rocket racer is, or launch dwarves at trolls.