First post, so please bear with me.
I've been lurking on this site for the last few months, reading the articles and getting a feel for the forums, and this topic seems to come up quite often. I'm old enough to remember the average used game costing between five and fifteen dollars, which also makes me old enough to remember something about the way games were priced back then; the price almost always dropped low enough that a new copy was competitive with a used one. Up until Gamestop bought out EB games, and gained a virtual monopoly over the used market, used games were cheap enough to make buying new right when they came out a bad idea unless you had the money and couldn't wait. However, I bought almost as many new games at the time as I did used, because publishers actually tried to compete with used prices.
Now, I don't mean that the prices for brand new games were significantly different -- actually, they've been pretty constant for at least twelve or thirteen years -- but even as recently as 2003 or so, games would be re-released in a heavily discounted form about a year after the initial release, assuming they did well enough to warrant it. I remember buying AAA PC games for $10 brand new, and PS1 and PS2 games for $15-20. Today, thanks to Gamestop's monopoly, and corporate greed on the whole, we no longer get these kinds of discounts. This is the real reason games are too expensive these days; there is no real competition from used games, and as a result, no reason to significantly cut the price over time.
TL;DR
Games are expensive now because without true competition from used games, the publishers no longer have any reason to cut prices.