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Why should it be fine? Surely it should be up the copyright holders to determine if that's acceptable. I'm not convinced either that it should be universally possible, selectively possible or outright banned. I just don't know. Sure it's beneficial for the consumer; but it's not (directly) beneficial to the developer.
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It’s incredibly restrictive for the copyright holder of a piece of media to prevent the resale of a work they produce. A book publisher doesn’t stop someone selling their old books, a painter doesn’t stop her commissioners from reselling her paintings. Digital works seem to be unique in terms of restricting resale, and since digital media is supposed to be about free-flowing information that seems pretty whack.
To me, a developer or publisher of a game shouldn’t be trying to bind their products to people for life. The immediate reaction to that is that reselling hurts profits, but the strange thing comes from how most other media industries survive despite this.
Ultimately, I think publishers should be able to survive without having to resort to ridiculous restrictions. If they can’t, that signifies a bigger problem with the industry than just evil Used Games.
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Converesly, I'm put off getting into OnLive. As much as it appeals to me, there's no way to integrate Steam and OnLive accounts. I don't expect to pay for the Steam service and get OnLive service for free; I would pay extra to support the OnLive devs. However, I'm not paying for that. I'm paying for two separate, largely identical copies of the same game.
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I dream of a day when Steam creates a service to compete with OnLive. It’s right up their alley, and they have an advantage of a huge existing install base.