Majoru Oakheart
Adventurer
I see what you mean about undercutting the store on most products, however, the store doesn't sell scenarios so that product is exclusive to paizo. Expeditions are the same way, but since WOTC has no subscription model then players must get their products from stores (online or brick). I don't see D&D expeditions being sold by WOTC via PDFs as hurting the stores.
So is the current AL model trying to avoid undercutting brick and mortar stores? Is this also why they don't sell current products via PDF and only sell out of print products?
Yes. WOTC pretty much created the entire campaign to show to Brick and Mortar stores that they still support them. In the past at their retailer panels at GenCon, they've been criticized for not strongly enough supporting the B&M stores. Online stores like Amazon have large discounts, have broken street dates before and delivered books to customers before the stores were allowed to sell them. They were fairly vocal about the fact that their stores lived or died by D&D sales since they were the major playing in the RPG business. Of course, most of these complaints are about 10 years old now.
Over the years, WOTC has made a large effort to support the B&M stores to show that they are 100% on their side. I'm virtually positive that their decision not to sell PDFs of current products is entirely an effort to tell B&M stores: Look, we aren't competing with you. If people want our books, they HAVE to come to you.
Which is why the only place you can obtain Encounters and Expeditions adventures is through a store. It's also why the mods are free. It's to encourage as many players as possible to play D&D and to do it inside a store. It's to make it easy to find DMs since the DMs don't need any resources at all in order to run: Mods are free, you can run a game entirely using the mods as well as the Basic Rules online. So, players have to ask the store to get a mod and the store can deny the mods if they don't take place inside their store.
Whereas, with Pathfinder, you can order the mods directly from Paizo and then run your games days in a Community Center somewhere with entirely books you bought directly from Paizo and therefore never involve a store in your game at all.
WOTC wants stores to feel that they are the good guys.