Sounds like a plan.
Rumors like this tend to underestimate the amount of used game sales.
As for the supposed resolution the console will render games at... Fat chance. Monitors, Projectors, and TVs capable of the resolution are in the 10,000+ range. The cheaper TVs and monitors are $10,000+, most don't even have a price. You would be better off hacking up a few low cost monitors and combining them in a single custom frame. Then consider the GPU requirements to play with acceptable graphics (IE. around the level of RE5). I can't see any single GPU, currently out, pulling it off.
They are a business all the same, why should they give up their profit because another company doesn't like the current laws?