They do.
There are more successful game developers, who are making more money on more platforms, right now than there ever has been before in the history of the industry. More companies make more money off their hard work right now, with a used games market, than ever before.
Plus, there's this underlying assumption that all used game sales and new game sales share an inverse relationship, i.e. every used game sale subtracts from one new game sale, but that's total conjecture. It's much more likely that many used game sales have minimal effect on new game sales, that is to say, people who buy games used would never have bought them new to begin with, so removing used games would not increase sales so much as it would keep people from playing games at all.
I get what you mean, but if you think about it, transactions involving paper money (physical currency) are just as abstract as digital ones. A piece of paper with some ink on it is just a piece of paper. The actual worth or value of it has nothing to do with it being a physical object; it's what that object represents that has value. The physical symbol is arbitrary, it could be a piece of paper, a chunk of metal, a bunch of twigs, or a plastic card. The currency itself doesn't matter, physical or digital.