When I say bad for business, I am not really speaking about money and purchasing things with RP.
Games need incentive for people to play, and for League, mustering up enough IP to be able to purchase something is one of those.
I am not saying that people will get bored and leave if they are able to purchase champions quick and cheap(ish), but gathering IP is some sort of motivation you could say.
Person A: ''Aw man! I really want to buy Yasuo, but I don't have enough IP!''
Person B: ''Don't worry, I can just sell it to you for half the price so you don't have to work for it.''
One thing League lacks for older players is a sufficient IP dump as well. There are plenty of things to buy, but once you have what you need / want, everything else is pretty lackluster.
A good thing is that this can allow players with lots of IP they have no use for to purchase champions for others, sell and repeat, just to get rid of the stacking IP, but the players who bought the champions for cheaper will eventually get to that point as well (much faster than before).
At some possible point, there will just be plenty of champions you could buy from plenty of players and you will only have to put in half the effort to get the champion that you want. Good for players, but not the um...''economy'' for lack of a better word.
The sell back thing can also influence real money trading more since you can just fork over smaller change than Riot sells it for with RP, which makes them lose money. With 10 U.S. dollars(1380 RP), you can buy any champ you please from the in-game store. If there is a chance that you cannot find anyone willing to sell a champion they are not using for IP, you could go to a third party website, use maybe like 5-8 U.S. dollars and be able to get twice the amount of champions you couldn't have gotten with just 1380 RP. The rates of course, depend on how much the the champion cost.
There would have to be some checks and balances to ''slow'' things down as much as possible.
Something like:
- Only being able to sell champions you have owned for a month / haven't used for a month
- Only being able to place / buy 1 (or some amount) champion for sale a week
- Having a certain amount of time your account has been active before you can sell / buy champions
edit: Like I said, I absolutely LOVE the idea, and I am not saying that I wouldn't want it implemented, since it helps the common player or very casual ones, but it is not healthy for Riot.