I should probably refer you to the basic economic principles of supply and demand... but I suppose I can give a quick summary.
When game stores and the like can continually move a product that's in demand, why would they lower the price? This is why most 'used' titles start off about $5 less than their new equivalents.
When demand for a game slows, typically because it's old and people have played through it all already, or when a game company puts out a GOTY or other new edition, making the older editions obsolete.
Also, a lot of game with high replay value like CoD, Gears, Halo and other FPS's, will likely not drop until there is a sequel, and then most of the fan base moves to the latest title, meaning the community for the older game dwindles, causing even more people to trade it in... it's a cyclical downward spiral to worthlessness