Today I worked out a couple of principles that make arcade games fun.
First, you have to feel in control of your ship/car/man/whatever. So that when you get hit, you say “Oh, shit! I should have thrusted!” (Asteroids) instead of “Oh well, another ship gone. I wonder what hit me?” (Star Castle).
Second, you should be able to control the form of your attacks — in short, have a strategy: Qix, Space Invaders, Asteroids, Pac-Man.