people make purchasing decisions based on the options available.  minus the option of buying it used, there is no indication that video game players will simply stop buying games as if the ability to buy used games is the driving force behind their interest in video games.  quite the contrary.  video game players will simply adapt to the options available, which will be buy it new or simply continue to buy it used and pay extra on that used price for the desired additional content that will come with a fee but will in turn provide developers with revenue from used game players. 

but consumers seeking a lower price because it is available does not mean that the price of new games are too high.  it means they are simply seeking the lower price because it is available, but absent of it would still purchase games at the price it was available at.

It's true that not all players would stop buying games used if they couldn't. But many would buy fewer if they have to spend more per game must likely they will be getting fewer games.  Them being completly unable to buy used is probably not an option unless companies go digital only and that opens up other issues..  Not getting all the content without paying more doesn't just happen to those who buy used.  Many games have incentives on buying early as well or you can pay an extra $ for DLC.  Dragon age orgins for instance.  Yes only the first person to use the codes could get the DLC but even if you are the first one to buy the game if you got it after April 30th the deal is off and you would have to pay as well.

People don't only buy things for lower prices when they are there.  People wait for lower prices as well.  When it comes to video games the prices don't stay at $59.99 for too long.  So people know they can wait for that.  Some don't want to others do.  Some wait till games are game of the year edition or greatest hits.  Some shop around between stores.  For those who don't buy at the price of the game when it is brand new the price is too high.  For those why buy it at that price it isn't.

1. Highlly unlikely. I know a LOT of people that download their games, they will not buy the games either way, they just don't have the money or think of their gaming hobby as something secondary that are not willing to spend their money on.

2. Maybe, but with this option they will STILL get the games used and even for a LESSER price, because the reseller cannot charge as much as intended, because they are selling a "gimped" game. So those buyers are also gaining.

3. True, but they can still wait till the game naturally sells for less, buy it used for even less money, or pay those 5-10 dollars that the store is offering as discount for a used game.

4. True, and that will still happen, but not as soon as is happening now, and not because the retail store is selling a used copy for just 5 dollars less earning all the profit for themselves, instead of selling the new copy.

This will not destroy the used market, this will just make it less desirable for the retailers that are abusing of it, and will (most likely) reduced the price of the used copies, so the people will not be as tempted to resell their copy and the stores to push it to their customers.