It's called a "moral panic", and they happen all the time. There have been moral panics about rock music, comic books, teenage sex parties, fictitious drugs, and video games.
If anyone wants to waste an afternoon developing a raging headache, I highly recommend reading some of the Wikipedia articles in the Moral Panic category.
Is there not, however, such a thing as a Moral Panic Panic?
For instance, if I manage to round up a dozen mouth-breathing parents to join my group Concerned Parents Against ASCII Porn On Twitter and it'll immediately be picked up by thousands of new outlets. There'll be a hundred front-page articles about the "New Puritanism" by next Sunday.
Bingo, we have a moral panic panic, and there's a moral panic panic to go with every moral panic, usually on a much larger scale.
My real point here is to point out that the moral panic about Dungeons and Dragons was probably never more than a very small number of people making a small amount of noise, amplified by a media hungry for controversial stories about stupid people.
Like the book on which it is based, the film treats the playing of roleplaying games as indicative of deep neurotic needs. At least one protagonist is (or at least appears to be) suffering from schizophrenia (or some analogous condition) and in the end, the attainment of mature adulthood by others players is accompanied by the abandonment of role-playing games.
