I agree, it's probably a myth that new AAA game prices will go down, if there would be no retail.
Like you said, why would Microsoft and Sony lower the prices if there's no real competition.
Price elasticity is a very real and well understood phenomenon. In a digital world where there are extremely low costs associated with distribution and zero per-unit manufacturing cost you can make really aggressive trade offs. If a million people would buy a game for $60 but a ten million would buy it for $10, what do you think a publisher should choose?
Having physical copies at retail alongside digital currently restricts this kind of extreme flexibility in pricing. It also creates a shadow market for resale that the publisher sees not a penny of. GameStop's existence is largely at the expense of profitability in actually developing and publishing games. Once retail is no longer a dominant part of sales they're going to find out how wise it was to push their luck. That's part of what was offensive to me about Microsoft's original DRM plan: their announcement actually enshrined GameStop's leech status, catering to GameStop's needs instead of mine as a consumer.
Yes, I expect the counter argument from those who sell games to offset costs — but remember whose pocket is getting lined in the process, and what it does to game prices. The industry is much healthier and there's less upward pressure on game prices when everyone who plays a title is paying the publisher and developer for the privilege. Consider the usual transaction: I buy a game for $60 and sell it back for $15, then GameStop resells it for $55. Consumers have spent $115 in this scenario. Let's say GameStop makes $10 off the new sale, and clearly they make $40 off the used sale. The publisher gets $50. Cut GameStop out of the equation altogether and the publisher could sell the title at $30 to both consumers and still make more money while both consumers spend less.