Yup. So?
If the demand for used good goes high enough, then the price of used goods will rise in relation. And then it gets to the point of equilibrium where people either can't get the used stuff or just prefer the new stuff.
The supply of used items is finite, heh. And any 'new' used items that feed into this market will have been taxed once already. =)
But with the market-driven reduction on the prices of new items without imbedded taxes under FairTax, most purchases will cost, roughly, the same. People ignore bargains all the time (I'm a big used-item nut) and if overall prices are about the same, most people won't bother.
The "so" part is the subsequent massive downturn in production. Manufacturing will suffer bigtime with significantly fewer people buying new goods. Technical progress will slow with less money encouraging new products. The poor may suffer as well, as the cost of used goods would rise substantially.
This would (may?) have a positive environmental impact, so NSRT should get the tree-huggers' support.