Great answer, by the way. Definitely cleared up a lot of questions I had.
Patents are a way of protecting a legitimate R&D effort. Imagine the disincentive with regard to R&D if a company had no protection from a competitor simply taking their idea once they came to market.
The key is to protect patents from abuse, while still providing a means to protect legitimate effort in innovation for a reasonable period of time.
Yes, allowing any random developer to create a spreadsheet or first person shooter or social networking app would obviously bring innovation to a crashing halt.