They're very much overkill for gaming.
The popular price/performance pick right now (until Ivy Bridge comes out in a month or two) is an i5 2500k, which is usually in the lower $200s. The rationale for even moving up the product line to the i7 2600k tends to be if you're also going to be running apps that can utilize Hyperthreading.
Even then, it can depend, since for many games the bigger factor is your GPU. The harder time your GPU is having with a title, the less difference you'll tend to see based on the CPU. For example, if you look in this article
the Skyrim performance gain on a moderately overclocked i5 2500k is fairly pronounced. Go to the next page for Battlefield 3, and it's very clearly GPU limited as all but one CPU turns in nearly the exact same performance.
If you're looking to dump a ton of money into a gaming rig, put it into the GPU first. Much past a $200-300 range CPU tends to just be for bragging rights, or non-gaming tasks.