I can see why developers and publishers would be upset. I know I see used titles on store shelves only a week after they are released. People who would buy the new copy choose to save a few bucks and buy the used. If games are then resold four times that is three lost sales which is a fortune lost on every game.
Example would be a title like the Conduit or RedSteel2. I wonder how many people bought the games used instead of new and how many sales were lost. Both games were hyped to death yet both titles lacked sales. I think rentals and used purchases probubly contributed to their lack luster sales.
As for hurting retailers and forcing retailers to go under. That is perposterous. BestBuy , FutureShop , Walmart , Zellers , Target all the major North American retail chains would still sell video games. A cease in used games would only hurt some retailers like GameStop or EBGames. Even those retailers could survive without used sales they just woudn't turn as large of a profit.
Infact I recently heard from Pachter that a retailer makes about ten dollars off of every new title they sell. But when they sell a used title they can make like 40$ at times pure profit. It is way more profitable for the retailer then the publisher/developer and that is sort of wrong as the retailer doesn't do any of the real hard work!