Well, could have another brief fiasco, a la dc universe online

Zero chance this happens in my opinion. It's either a rumor or a bluff at changing the business model with gamestop type places. Some various side effects of this, in no particular order:

1. Consoles die. There will need to be some means of migrating all your old licenses to a different machine. The existence of such a utility would kill the whole 'point' of this.

2. People buy new with the intention of selling quickly. As mentioned in OP when you go to a game store even if a game just came out a week or two ago the shelves will be lined with used copies. There are obviously a large number of people who buy games near launch solely with the intent of reselling the game and getting most of their purchase price back. Get rid of them and you get rid of these players.

3. Games get old. I like old games. Especially now a days that console games are becoming more like PC games where the launch product is really just a beta release and the real game comes out a few months later after several patches - here's to looking at you Skyrim. And after games get old enough they're no longer available at retailers for new. I do like purchasing games largely because I like getting the media/manual/box but if it was no longer possibly to buy older games then it's simple: hello Skull and Crossbones.

4. People like trading games with their friends. This makes that impossible. There's going to be some outrage when people don't understand why they can't lend a game they just bought to a friend. It's THEIR game after all.

5. Competition. Maybe most importantly of all is that this would piss off players. If the 720 launches with this it's going to give the PS4 a vastly bigger edge than those little red lights ever did.

This would be a deal breaker for me. I'm mostly into retro gaming although I buy current-gen consoles too. I buy a few new games a year (just the biggest hits) and spend the rest of my money on older and more obscure games that I missed out on over the years. A used game ban would take me out of the new game and console market completely.

On a related note, I had my 360 repaired by Microsoft a few years back, and it was returned with a note that said I would have to redownload the games I had purchased on xbox-live to re-update them from the trial versions. So I did that and it works fine, except every time the console is turned off all my games revert to the trial versions and have to be redownloaded when I want to play them again. I can't save my progress because every time I turn on the machine I'm back to level 1 on a trial version until I tell it to unlock and redownload. It irritates me that they are considering an all-download marketing model when the system they have in place doesn't even let me play the games I already paid for. I also don't like the idea that all my games must be stored on their console when their console's life expectancy is about 3 years before breaking.

You don't have to re-download them every time, you just need to be logged in to Live.

If you don't want to have to be signed in to live to play them, then you'll need to do a license transfer:

1. On your console, sign in to Xbox LIVE using the gamertag that you used to purchase the content.
   
2. Go to the Settings, and then select Account.
   
3. Go to Your Billing Options, and then select License Transfer.
   
4. Follow the on-screen instructions to transfer the content licenses.

This. Ultimately I just don't see it happening.

Thank you I will try it.