I think it would be kinda fun save for the pain issue! I just don't think it would be worth the chance of someone getting shot in the eye or some other place which would cause some severe injury!
Maybe someone could come up with a paintsystem that would not hurt, I know it would have much less range and accuracy but hey if I were the shooter I would try to get as close as possible so I could see my target!
Maybe they could use that same system the armed forces uses that sets of buzzers when the target gets shot!