Reward > Frustration = Gameplay.  A smooth graph is uninteresting.  It's the valleys in the graph that make the peaks stand out.  Slot machines know this.  Fraternities know this (pledging / hazing before induction).  Gears of War knows this (that's why they measured gamer heart rate and appropriately adjusted the 'exploration' valleys to land before the 'locust swarm' peaks).  Zynga knows this - that's why you have to get 5 more friends on Farmville before you get your chicken AND your barn.  Pokemon knows this (that's why kids need to memorize a 15x15 grid of counters and learn all the hidden levelling rules that aren't mentioned anywhere outside of strategy guides).