This thread has really exploded over the last day or so...I can't deal with all of the various individual arguments, but I'll try and address the central themes of most the "anti-magic shoppes" posters.
Magic 'shops' don't exist, but magic item traders do.
This is a superficially fair argument. There are no "Lear Jets R Us", no "Land Titles Warehouse" or similar 'shops' for the extreme end of luxury goods. The problem is that there is the notion of magic item accumulation which has been ignored. The best medieval equivalent luxury good is land, but land is a finite resource i.e. once the land has been allocated, it cannot be re-allocated without the landowner forfeiting his claim. The same is emphatically not the case with regard to magic items. The supply of magic items is vast. As I have explained in my previous post, the sheer number of items in circulation entails that a professional service would exist purely on the basis of selling these items.
Let us extrapolate from the very good worked example that Non-human resources posited about the 5th level wizard with a 1,000 gp profit on his items. Now, he is singly ill-equipped with the requisite skills and networking to sell items of such quality, but he could hire a high-level middleman to sell it for him. Let us suppose that in a typical metropolis there are some fifty 5th level wizards all making these items on a reasonably regular basis (I actually substantially underestimated the population of wizards in large urban areas), and they have a mutual middleman professionally employed. It is thus a simple question of located that middleman and purchasing a good, and they are hardly likely to be elusive given their desire to make a sale.
Lack of supply isn't a problem, lack of demand is
This is one of the more sophisticated arguments put forward by the antis, but falls short. If nothing else, the vast wealth generated by the magic item creators themselves ensures that there is an "internal market" within the magic item creation community. A wizard might sell a couple of +1 swords and then buy a Headband of Intellect in order to benefit his studies. Furthermore, the vast income inequalities characteristic of a medieval (especially Byzantine-style) setting and the dominance of personality in the context of civic leadership does press a huge demand for magical items. The city that can ensure that its mayor gets a +6 Headband of Intellect is at a huge advantage in terms of civic administration as opposed to one that doesn't. Magical items aren't curios for the rich and decadent; they are real investment goods. The +6 Cloak of Charisma can turn an unpopular noble into a respected one, the homely prince into a desirable bachelor or the shy monarch into a confident leader.
I don't like magic shops, they make magic too common
The sentiments seem fine, but are illogical and arbitrary. Particularly in the form expounded by DragonLancer, they seem to place campaign feel over authenticity, which unfortunately then collapses feel. A DM is entitled to make all manner of arbitrary and peculiar decisions. He can place a 1st level commoners with 3s in every stat at the head of a conquering tribe, he can make all peasants perform a ritual Morris Dance every Friday, he can enforce a rules that all elves spontaneously combust at the age of 150 or he can say that there are no magic shoppes. Of the four postulations, all could have a campaign justification, but if suspension of disbelief is stretched too much in the name of "fantasy" it ceases to be credible. "Fantasy" doesn't mean that you can throw out human nature. "Fantasy" doesn't mean that you can deviate from rational norms. "Fantasy" doesn't mean "make-it-up-as-you-go-along". And it doesn't mean that there are legions of retired wizards twiddling their thumbs in penury and dreaming of the good old days whilst their magic item creation feats rot. Random-user has elegantly explained the motives behind magic item creation: money. Once you remove the profit-motive and the pursuit of money from the field of human calculation, you've not simply made a "fantasy" world. You've made an unbelievable one.