I'm not one to sell back my games, I keep them as part of a collection, but I do buy a lot of used games. Mostly the used games I buy are less popular games that I can live without, or will never play. Lot of Superhero movie games, run of the mill shooters and RPGs, etc...
I almost always buy the AAA titles upon release. The Uncharteds, Call of Dutys, Skyrim, and so on, because I hate to wait for games I WANT to play.
Eliminating my ability to buy used games will severely limit my collection, but not my overall gaming time. I'll still buy the games I want, I will just have to pass on buying Iron Man 3, unless I find it new in some bargain bin.
However, I do think it will really hurt publishers of mediocre and average games. I bet a lot of people buy those type of games and quickly sell them to recoup their money. You're not going to be able to do that if the used game market is eliminated. Most people arent going to risk $70 (which i assume is going to be the new price point) on a stinking turd of a game.
They will also eliminate the "rent first" mentality, forcing people to rely on game reviews more than ever to see if the game is good or not.
I'd hate to see Gamefly go out of business; they have been very good to us with their sales over the last few years.