Interesting read...My only concern is that I don't want to see replicates of games...The repetiton of genre (WWII shooter, Sand Box GTA) is already bad enough. Perhaps I don't completely understand the way an engine functions, but I don't know how happy I would feel if every game was just a skin on another.
But economically your idea is sound. I'm not a bif fan of paying so much for games. However, I'm not sure that developers, given their tendency of late to charge up to $100 for a limited edition, would be inclined to reduce the price. For Wii sports and Wii play and even Resident Evil the price point makes complete sense, because of the limited development costs. Even if a game were to use middleware and be made on the cheap, the developer isn't so likely to pass on those savings, especially since gamers seem willing to shill out and extra $60 for a halo helmet.
As with your gas price analogy, when the consumer keeps paying premium prices, why would the gas companies ever drop them.
