There has been a lot of criticism of the used game business by big players in the industry. Mostly it is argued that studios lose money when people buy used copies of games, rather than brand new copies from the store. However, at least one market researcher claims that it is the exact opposite.
Eric Villain of OTX recently spoke at the MI6 conference in San Francisco about how the industry benefits from the reselling of games. One of the major benefits he mentioned was in-game advertising. The more people that play the game, regardless of whether or not it was purchased new, the more people they reach.
One other aspect to look at is the money made by gamers when they trade in their old games. Many times they are getting rid of old games so they can afford new ones. Sounds like a decent trade-off to me. Personally, I mostly pick up older titles for cheap used. Newer games I generally pick up brand new.