Great idea but like everything else run by a big corporation, it is too expensive.
I really want Call of Duty 2 as I have never been able to find it again in the shops but at £20 I think that is far too expsnive for a game which is 5 years old. If it was £9.99 I would buy it instantly but not at £20, I am not that desperate.
They should really have prices whcih reflect the market for older games. Maybe have a tier system – new games at near full price, games over 2-3 years old should be bargain bucket.
Unfortunately I think people will accept these prices and pay them which will in turn justify them to Microsoft and they will not bother changing them.