This doesn't appear to be complicated. I'm not sure why everyone is so confused and angry.
Based on what they are saying (officially), this sounds analogous to PC software. You can go buy it on a disc (but who does that?), and it comes with an activation key which you type in once and you never need the discs again. Its worked for PC's, why not a console?
So that alone would eliminate the used game market entirely. What use is a "used disc" when you need to pay the full fee to buy the license to use it? Might as well have just downloaded it (which is now what most people do with PC software).
But they say they have a solution that allows people to trade games online, and we don't know what that is yet. So I wouldn't grab pitchforks yet. There have been rumors of online game trading on Steam and people got all excited about it - that could be realized here.
I think the biggest kicker is that apparently you can't borrow a friend's copy, or rent a copy from Gamefly and play the game without installing it. So far, we're just hearing that you could "use" that disc to install to your own HD, but you'd still need to pay full price for the game. The only advantage to doing it this way is that installing from a disc is faster than downloading.
Some people think maybe they'll charge a fee for a temporary use of a friend's copy of a game, or to "activate" a rented game to be able to play it for a limited time. But why limit charging a rental fee to the supply of physical discs? Why not just do what iTunes (and other services) do with movies? Give people a complete digital copy of the game, and let them play it for a limited time. When that time expires, you can't play the game anymore.
There are a lot of possibilities. Some are good. Some could be bad depending on your situation. The way you buy and play games in this new generation is certainly going to be different, and probably closer to what you are used to dealing with on a PC. That's a change some may not like, but its inevitable.