...In addition, that hardware is going to be worth only a small fraction of what he paid for it initially by the time it becomes obsolete.
All of our hardware, GPUs included, will be worth only a small fraction of what we initially paid for it by the time it becomes obsolete.
How much do you really believe your video cards will fetch on ebay when they are lost within thousands upon thousands of other video cards just like them for sale by former miners just like you? Have the recent events in the scrypt mining world taught us nothing about the economic laws of supply and demand and how markets function?
It must be said though, this isn't completely true. Look back almost exactly 1 year. ASICs were just hitting the BTC world, and everyone claimed the same scenario. Lots of people closed out their GPU rigs and sold them, but the market didn't "flood".
Also you need to factor in resale because it's legit in recouping costs. I bought 25 of the little 1st gen 333Mh USB miners in late Aug for about $13-$15 each. They happily mined away making me (some) BTC through the spike in Dec, when I sold them for $45-$55 each.
Made a profit and they made me money from mining. Even if I had waited, and held them until now I could fetch around $13 each still.
I've got cards that have been mining hard for over a year, they are starting to show their age. I sell them on eBay, saying I mined on them, and people are still willing to pay 75-90% of what I paid. Each 7950 I sell fetches around $350 on eBay and has easily made me $1,000 in mining profit over the last 18 months.