They probably shouldn't be that high in today's market, but I think the used game market was help justifying that.
There's a huge issue with the Used Game Market, and it's several arms.
The first issue is every copy of a game you buy used (you being the gamer population) you're not paying the publisher or the developer any amount of it. It's all going to the company that's selling you the used game. At that point you might as well pirate, because the end effect to the Publishers and Developers is the same, but at least you're saving money.
So that won't lower the game price, and it also won't get you as many of your favourite publishers pumping a good game. Because unless it's a triple A block buster that sells a minimum of about 10 million? It's not worth the money to make. Hell, the new Lara Croft game sold 3 million copies, and Square-Enix claims it didn't do 'well enough'. (There's also another issue affecting this, namely the cost of making games is going uip to the point of stupidity, but it's not the main factor here, sadly.)
BUT, on the other hand, most trade-ins go towards new games. So you need those trade-ins because that's how the publisher is making their money off new games.
As for game prices going down? HAH! They could cost less than a million to make suddenly, and they'll still sell them to you at $60. Why? Because people are used to buying them at that price. And they will keep doing so, because gamers are used to it. We're comfortable, and as long as we're comfy with something, no matter how much we bitch and moan, nothing will change.