FLGS, as a whole, do not help to grow the hobby in any significant manner. Sure, there is the occasional store on/near a college campus that serves as a Starbucks for geeks, but that's the exception.
Have I done any formal market research? Nope. I base my hypothesis on my 25+ years of participation in the hobby. Never once have I met someone who started to roleplay because they just happened to wander into a hobby store -- even when I went to a college with the previously mentioned on campus hobby store.
The people who go to the hobby stores are the people who are already interested in the hobby. I don't garden. I never wander into an garden store. Ever. I don't like sports. I don't wander into a sporting goods store. Ever. I would expect that someone who doesn't game would visit a FLGS exactly as often as I visit a garden or sporting goods store.
On the other hand, I have picked up a random plant or garden tool for my wife when I've been at Lowe's for something else. I have bought a new basketball when I happened to see the display at Target. IMO, WotC needs to be courting Barnes and Noble and Borders instead of the FLGS. My local B&N has a variety of events, from politicians speaking, to children's story time, to writing workshops, to comic book night, to *gasp* board game night. I'm betting that they'd be quite open to having an RPG night, if anyone cared to ask them. These guys understand that selling books is selling books, whether it's MS Press, Del Rey, or WotC and that hosting events helps them to sell books. They are also quite competitive with the discounters.
If Amazon.com or BN.com start selling at MSRP, it won't drive a dime of my business to the FLGS. Assuming that I still spend the same amount of gaming (which is a dubious assumption), I'll be doing it at the local B&N. Why? Because they have comfy chairs, chai lattes, nice music, other areas (computer) in which I get a lot of books, and they have a children's section that makes bringing my kids along a boon rather than a bane. Plus, they're friendlier than my FLGS, have cuter sales staff (joking, but true), and it smells a lot better.
As far as us not currently living in a capitalist system, that's true. On the other hand, if the problem is government intervention, very rarely is the solution more government intervention. Delving any deeper into that issue, though, would violate the "no-politics" rule.