I think you are answering a question that he didn't ask.
If you don't want magic item shops, he would want any economy where this might be feasible. Because it could be feasible with some kind of market and demand/supply. But that's not what it's about.
The question is - how does it change the game (not the world) if there are no magic item shops and magic items become less available? How will it play differently? How can he ensure that the players still can face the challenges they meet (or figure out which challenges are "fair" to them).
It's a question of game design and not a question of world design.
It is a question of world design- its a simple fact of economics that anything that can be sold will be sold. If magic items exist, there will be a market for them, and wherever there is a market, merchants & other middlemen will pop up. Why? Because of another simple fact- not everyone wants what they have or has what they want, and that means they'll trade/barter/sale to improve their lot in life.
The instant a farmer on a plot of land starts tilling and finds a +1 sword from some ancient battle, he's got the option of keeping it for himself (which may be against the law) and continue farming, keeping it for himself (which may be against the law) and becoming an adventurer, or selling it for something to improve his way of life- new seed, a new plowhorse, bolts of fabric for his wife, a new roof...
The same goes for the warrior who has been using a +1 sword for years, and suddenly finds a +2 flaming Ghostbane sword...he has to decide whether to continue carrying both or to lighten his load and divest himself of one or the other...
The question isn't whether there is going to be a magic shop, the only question will be whether it will be a normal one or black market.
Arbitrarily excising the magic shop because its inconvenient is simply bad design.
Instead of erasing them, all you need to is alter them so they fit your world's internal logic.
If magic is rare and feared, the magic shop will be like the thieves' guild (in fact, they may be one and the same)- meaning that whatever magic they have will be of limited availability and ruinously expensive, far beyond listed prices.
If it is rare and respected/desired, magic will be gobbled up into the hoards of private holders (including PCs), religions, organizations and governments. Access to most items would be as "loans," and again, actual acquisition would be expensive- many times listed prices.
As magic becomes more common, the prices of given items drop.