Well, no, there are things they can't do. For example, they cannot advertise a used product as new when selling it to consumers. That's what at least part of this seems to be about. I'm wondering if it has to do with the advanced state of piracy now where people can make a used or illegally downloaded game or movie look brand new. When I managed a video store, people would bring in DVDs in cases that looked completely genuine for movies that hadn't even been released yet.
The main point seems to be that a game not sold by an authorized reseller does not have a full warranty, thus rendering it substantially different than a 'new' copy. If that's the case then I would agree that the "new" tag should be removed.