I wonder if it has something to do with an aesthetic reaction. When I was young and saw Frankenstein for the very first time, I can honestly say that I had never seen anything like that before. I didn't know the word "mundane" then, but it was the most unmundane thing I'd ever beheld.

Later in life, we're more educated -- we can talk knowledgeably about set design, cinematography, lighting, and all the other technical components that are important to the horror genre. Our sophistication deepens our appreciation for the material, but in some way it also replaces the childlike wonder we experience at the sight of Kenneth Strickfaden's sparking machines. Or Dracula's castle.

More eloquently put, monster movies are just so freaking cool!

On a more serious note, there's plenty to be said for the theories regarding feelings of isolation, loneliness, and rejection, and children identifying with movie monsters on that level. I'm no expert, but I suspect the monsters in question would be more the bipedal, humanoid creatures like Frankenstein, Dracula, the Wolfman, and the Mummy, than the giant lizards, apes, insects, etc. of later years. (Kong excepted, of course -- that poor guy couldn't catch a break at all. King Kong is one of the few films that have ever made me cry.) It's much harder to identify with, or care about the motivations of, a 60 ft. praying mantis, even if it is fun to watch it kick ass.

Likewise, horror material gives us, starting at a young age, some of the tools we need to process concepts like Evil and Death. (A wise religious instructor might do well to incorporate horror into their catechism, but that's just me.) Stephen King once remarked that he'd learned that his books are very popular in hospices. You'd think dying people wouldn't "want to go there," but perhaps horror stories are an easier way to rehearse for death, than to listen to one's doctors explaining on and on about the technicalities of the experience.

Magical imagery; sympathetic characters; metaphoric ways to think about death; pretty girls fallen helpless under the monster's sway (oh, yeah, let's not forget about pretty girls and metaphoric ways to think about sex!), castles and graveyards and lowering skies all shimmering in black-and-white; ancient curses and forbidden knowledge; wise professors and mysterious gypsies; the technical fascinations of makeup and SFX; everything on the page and on the stage and behind the camera and in front of the camera -- that's why I loved horror as a kid, and why I still love it as a grownup (a grownup kid, more likely)!

Vlad
The most merciful thing in the world, I think, is the inability of the human mind to correlate all its contents.
-- H. P. Lovecraft