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Machiavellian said:

Here is my scenario

MR. Z goes to gamestop and purchase a game.  
Mr.Z finishes the game in a week
Mr.Z sees poster from Gamestop saying "Trade in this game for instore credit"
Mr.Z goes to gameStop trade in game, Mr.Z thinks about getting a new game but there is another poster saying 2 for 1 used game purchase.
Mr. Z goes for the deal.
Clerk says if you get this powerup card, you get 10% on used game purchase and your purchase today goes towards points for rewards on teh website.  Also you get game informer for 75% off.
Mr.Z thinks thats great and sign up.
Cleark ask MR. Z if he has any games on this list that he could get 50% more for his trade in.
Mr. Z looks at the list and see a number of games he has he can trade in
Mr.Z bring those games in trade for instore credit and then client says, you can use your rewards to get 5% discount on a used game.

Now MR.Z is no longer thinking about purchasing a new game because Gamestop has made purchasing used a better proposition.

I probably would go on and on but this is the experience I have seen at gamestop more than the hypothetical one you present.  I have seen your argument from a few people but I highly doubt that it’s the norm.  If you sell your game to someone, you probably going to spend it on a bunch of different things and a new game is probably on a list of hundreds with a used game above the new if its cheaper.  The facts are that used games are a billion dollar industry where companies like gamestop makes huge profits from.  If gamestop is making those profits then someone else isn’t.  You couple that with grocery stores, and every other outlet selling used games now things start to become a problem.  When the scale of used games was small, your scenario definitely probably helped the industry but today such things have changed and every retail outlet is looking to make money like Gamestop.

Well my hypothetical experience is what I do and my friends too lol... I sell used games to buy new ones at launch.

But I just can say me ;-D I don't know how the other users do.