Neither of those conclusions make any sense. EDGE would lose some credibility (few people outside gaf will care or remember in a week), not "all" of it. Microsoft presumably has done some market research on this and believes that it's worthwhile, which is more than gaf used-gaming armchair analysts can say. Indeed, few gaffers know anything about the market and base their gloomy analysis solely on the fact they don't like the idea. It's probably a slightly risky move, but to suggest that it will single-handedly doom a console regardless of other factors is completely absurd.
With all due respect to your optimism: No. It would absolutely doom the console.
If the "gaf analysts" are appalled by the restrictions, imagine what the average consumer would think. It wouldn't be pretty.
I basically rolled with Xbox this entire gen, but I'd switch to Sony in a second if the "internet required/no used games" rumors are remotely true. Hell, if Sony did this too, I'd just go Wii U.
The suits operate in an alternate reality where they think forcing everyone to buy new is a justified conclusion, despite every generation before it operating without stifling used games. In actuality, a large amount of people, faced with "no used games - new or nothing," would simply pick "nothing."
I also imagine that this would have an impact on companies with long running series. How can you catch up on the previous entry if stores haven't stocked it for a long while? The negative effects to such a decision would be countless, and you can mock "armchair analysts" all you want, but they're absolutely right.
And I don't even really buy used games like that, but I do sell mine when I've beaten them. No reason to hold onto what has essentially become a coaster to me, especially when I can get 30-40 bucks for it. Buying and reselling games allows me to justify my gaming habit financially...if I couldn't do that anymore, I wouldn't even bother.
Also, this would absolutely CRUSH developers who don't have the manpower to make 30+ hour experiences. Even if it was a great game, people would go "well, the campaign is only 12 hours long...why get that when I can spend the same amount of money to buy this 60+ hour game that 'gives me more for my money?'"
So, no, it's not hyperbole to say that this would doom the console. If these rumors are true, they absolutely would.
As for Edge, I'd say that reputation harming misinformation that borders on disinformation would probably ruin their credibility SEVERELY. No question about it.
Ebooks are selling like hotcakes. These are single account.
The metaphor doesn't break because it's referencing physical copies of both books and software.
Half the reason the public game is because its fun and can be cost effective with used games. You take those two things away and you'll see a mass exodus.