"If people can play hundreds of old games for free, it will be harder to force them to pay for newer games! They'll get used to 'free' as a price point, and they'll have lots of free games to keep them amused!"
No, I didn't read the 30 page document the ESA wrote. I just know how people in power think: They want to keep as much control as possible, to buttress their position, even to the point of doing seemingly insane and harmful things that might, conceivably harm their position.
The hacker argument is particularly pathetic, but you're right: The 30+ pages wasn't motivated by that tiny excerpt. The 30+ pages was motivated out of desperation, since they're looking at declining sales numbers in the traditional gaming space. [1]
[1] http://gamerant.com/npd-gaming-decline/ http://www.npr.org/blogs/alltechconsidered/2013/03/22/174940...