I am not a gamer, but aren't high FPS tiring to the eyes because of the lack of natural motion blur which gives the sense of unnatural movement? Isn't that more important than increasing FPS?
Of course LCD displays will be locked to particular refresh rates on a TV probably 24Hz, 50Hz or 60Hz (although it may then apply motion compensated interpolation to take them up to 96-120Hz or even 192-240Hz but these are often turned off in 'Game' mode to reduce latency and provide less lag between input and result).
* Infinte frame rate is effectively whatever your mind can't distinguish from infinite.
That's quite an interesting thought actually, how many fps do human eyes see at?
To answer that you I imagine you'd need to get into how the human eye works (rods vs cones), how moving images are created, and how interlacing works on movies and things compared to game engines which don't interlace.
Flickering light does make sense, and of course videos make sense as you're limiting the frame rate.
There is obviously a limit to how fast our eyes see, and that limit is somewhere within an order of magnitude or so of 100fps. But it's still a mostly continuous process. There's no hard dividing line between one frame and the next.
Any game without motion blur is going to show momentary disjointed images, which is alleviated by motion blur. However, you still want the high frame rate for smoothness and low response time for inputs.
It makes the game smoother because there are more game loops, so more calculations on a smaller time delta.