The word is definitely not well received by everyone. Even the gamification platform companies (ours included) don't really like the word. It leaves too much to the imagination and carries a lot of baggage.
Another issue is that people think gamification is the new SEO. Gamification will not magically bring new users to your site. It's as you said, about incentivizing or engaging with your current users.
Yes, gamification has been poisoned by "the new SEO" crowd. What was once a useful tool (Nike+) has been abused and bent into all sorts of shapes by people who are, generally, completely oblivious to the decades of game design the techniques build on.
His perceived ineptitude of the practitioners involved is a large part of why Bogost is calling out gamification as a marketing term here. Game designers don't call it gamification. Game designers make games.
Another issue is that people think gamification is the new SEO. Gamification will not magically bring new users to your site. It's as you said, about incentivizing or engaging with your current users.