I think they're helping people. I know I but a lot of games I wouldn't normally buy if they were so cheap.
At the same time they are also hurting some people... as I know people who have bought a system and games, traded them in, rebought the system, traded them in.
I think they're a pretty nuetral force working like a pawnshop. Good for those who only buy. Bad for some who sell. Pretty uneventfull for the retailers, as a lot of the games people get used might turn them on to new genres or upcoming sequels.