Boy, so many other people seem to like their local game store. (But not all of you)
I wish I was one of those that liked their local gaming store. Unfortunately, I am not. They are not necessarily very friendly. It is very rare that they have what I am looking for. They have not done a very good job at obtaining new product in a timely manner. Most new books arrive 2-3 weeks after _everyone_ in town has them.
If it isn't a new, or a WotC product, they can offer to special order it to arrive within a few weeks. So, my impulse buy reaction is almost nil. I will usually order it online and I have found a great source now, so I am not really concerned if the local gaming store sticks around, or not.
Yes, you could argue that if I bought more there, if I did my special orders there, etc, then I would be supporting them and maybe they would be able to better increase their service. You might be right. But, over the last several years, their service has been so poor that I no longer care.
Anyway, my experience with a single store (even if it is the only one in the area) shouldn't be that big a reflection on what impact discounts at Cons has on the theoretically good local gaming store. I can understand the frustration, and I worked for a bookstore for 4 years, so I have a bit of a idea what I am talking about. The profit margin from cost to MSRP is 50%, generally. There will probably be shipping costs on top of that. Then there are the other business expenses. And the owner probably wants to be able to support his or her family. Your profit margin can disappear pretty rapidly. So, when the publisher offers big discounts at a Con, the local game store owner probably takes it just a little personally.
(Now, this is more suppostion and probably doesn't hold entirely true with all publishers.)
But, this is a hobby. And it is a tough market. And publishers will be at Cons and will want to give out a discount because many publishers are gamers too. They like to get out there and see the people that are buying their books. They like to drum up interest in their product and a good way to do that is to entice people to buy it at the Con, where new demos are happening and the publisher is there to answer questions ... personally. In short, they get caught up in the hoopla as well!
From the publisher's perspective, a Con is a good way to arouse interest in their product. They want people to pick it up at the Con, read it and come back to ask questions, then take it home and show it off. This helps drum up business for the FLGS.
While I understand the perspective of the FLGS, there is a certain reality that must be accepted as well. IF I had a FLGS (as opposed to a LGS), I would feel guilty about purchasing stuff at a Con. Of course, I would probably encourage the FLGS to get the product in stock and I would probably tell the other patrons how cool it was and thereby improve sales, as the publishers envisioned I would.