As a Football player, I can tell you that to a certain extent the padding makes it fun, just the thrill of grabbing your opponent by the shoulder pads and throwing him to the ground is exhilarating, not to mention that you look straight big. There was also a big pushback against Football in the early 1900's. they needed to be seen doing something to make the sport safer so they added pads, whats funny is that it may have actually made it more dangerous in the long run.
I played American football in high school in the previous millenium... along with a brief stint of rugby in college. The contact part was definitely part of the fun. I found rugby to require far better conditioning than I had....
I think your point about the un-intended consequence of the pads is accurate. If you see a professional athlete going 300 lb/ 136kg, who runs a 4.5-5 sec 40 meter dash - the basic physics lead to injury (mass x acceleration = force)
I understand how the popularity of soccer/football took off across the world. Comparatively simple rules, action is much more continuous, limited equipment - so it can be played in almost any environment at any skill level, but the mastery is the hard part. I am surprised that rugby has not acheived the same level of interest for the same basic reasons.
How much of their relative popularity goes to the old adage: Soccer is a gentlemen's game played by hooligans, and rugby is a hooligan's game played by gentlemen?
On a bit of a tangent here, but one of the all time great comparison of Baseball (and probably much of Cricket) to American Football by George Carlin:
http://www.youtube.com/watch?v=qmXacL0Uny0