2nd hand gamng market & price point r problems

i'd like to see what reasons people attribute to this instead

Yes you do.   GTA IV

Oh yeah, forgot about that :P Whoops. So yeah, selling less than April '08 is hardly surprising

And then it caught up and sales dropped lower than they had been in years.

Your thesis assumes that people who just lost their jobs and knew the job market was going to suck for a long time would nonetheless increase their entertainment budget for over half a year. I reject that idea.

Next month we get an article the industry is doing great thx to all the new releases....We maybe have 5 or more games in May that will sell more than 500k (while we only had one in April)..

How is this baffling? "Worst since April 2005"; April 2005 is roughly equivalent to the period to April 2010 on a 5 year cycle. 3DS, likely Wii 2, PSP2, PS4, and Xbox 360-2 will be out in the next 18 months.

Also, yes, there are big releases just over the horizon; people are aware of this.

If games were made that are truly worth keeping, used games wouldn't be a significant problem.

As for Pachter, I guess he is just noticing that without Call of Duty: Modern Warfare 2 padding sales numbers for 'core' games as a whole, he sees the host of frontloaded titles that blip on the charts and then disappear (Bioshock 2 anyone?

Also, we are several years into this gen; it won't ever top 2008 again; they only decline from here. When every option has been exhausted to spur sales, and the dominant hold that the PS3/360 had on software no longer spurs sales spikes, there isn't much left.
Sony has about 3 cards left: Gran Turismo 5, PS3 Slimmer, and Move
Microsoft has about 2: Natal and maybe Halo: Reach
Nintendo has about 3:Zelda, Vitality Sensor, and the remaining Wii series games

If the fable of the Boy Who Cried Wolf had a lesson for me it would be that people would have stopped listening to Pachter a long time ago, I guess it doesn't hold true.