A number of people have said they don't consider Dead Space and other horror games to be truly scary. These people point to the difference between startling someone with unexpected events and giving that person a lasting chill. It's a valid distinction.
As many have pointed out, the greatest barrier to evoking fear through games is emotional distance from the danger. Like any emotion, fear is rarely, if ever, pure. There are many types of fear, many mixtures. But any type of fear is basically a defensive reaction to perceived danger.
Some people are more sympathetic with story characters than others. A strongly sympathetic person can be affected deeply by fear through story, because there is not a great division between that protagonist(s) and self. But many others have a harder time connecting to characters. They do not feel much fear via games and movies because they themselves are not in any perceived danger.
So, obviously, the way to bridge that gap, to make a game truly terrifying, is to endanger the audience!
I'm only half joking. The best scary stories put the audience on edge long after the story has been told. This is generally, though not always, accomplished by making the imaginary danger seem real. The movie Jaws convinced a whole generation of movie goers that human-hunting sharks are real. Films like Child's Play and Poltergeist instilled fear of dolls in countless kids. And how many grown adults are uncomfortable in front of poorly illuminated mirrors because someone locked them in a dark room with Bloody Mary? The scariest tales live on in reality.
Is it cruel to instill such lasting fears in people? Not necessarily. The great American writer Flannery O'Connor used horror to communicate themes which her readers would normally be resistant to. In other words, she used fear as a form of mild violence to break past emotional barriers in her audience. In O'Connor's own words: "to the hard of hearing you shout, and for the blind you draw large and startling figures." The most impressive lessons in any person's memory are often those cemented by deep emotional experiences. Fear is one emotion which can ensure the questions your story raises are not abandoned the moment the player steps away.
Cheers to the things that go bump in the night!