When I was 16, I worked for the Youth Conservation Camp system in Wisconsin one summer (I was born in the U.S.). I got home with somewhere between three and five hundred dollars (sorry, can't remember exactly). What I do recall is that the FLGS in Oconomowoc (which truly was an FLGS, even if you had to drive to get there) got about $100-$150 from me the day after I returned, spent on AD&D 1st Ed books and Dragon back issues. Frankly, I felt like I got a lot for that money. It was like finding a major horde.
Things have changed. It's much harder to be a successful small retailer today than it was in the 80's. I pity the guys who have mall contracts -- apparently, it is now standard to tie the cash registers into the mall manager's office, and if you make more than $X a month, you have to pay a percentage to the mall. In addition to rent and upkeep.
(Frankly, in a mall, I would probably discount heavily to put as much of that percentage into my customer's pockets as possible.)
Regardless of how you feel about your F(or not F)L(or not L)GS, online stores are here to stay. They are simply too profitable, and represent almost no risk to the investor. They can easily undercut brick-and-mortar places. Heck, because your operating costs are so small, you can easily sell things for a profit of 1 penny on the book and make money.
In Rising Sun, Michael Chrichton talks about the Japanese electronics market. A product will be brought out at such a low price that competitors from other countries are driven out of business....even if it means selling at a loss. Thereafter, when some of the competition has disappeared, the prices are raised on the "new model" and the monies lost are recovered. It is a very cutthroat (and successful) business plan.
Remember all those "Look for the Union label" commercials? A last-ditch attempt to remind consumers that if they buy cheap, it's usually beause someone somewhere is being paid cheap.
You can't tell me that we aren't affluent right now, in part, because we resort to enslaving people in third world countries to supply our manufacturing needs. Oh, sure, they get paid. But do they get paid a fair wage? Do they have the right to demand a better wage? To organize? What happens when they try?
I'm going to stop now, before I violate the "no politics" ban (if I haven't already).
The thing is, it is successful because few people will pay more now for something when they can easily pay less. It seldom matters what the long-term cost is, and it seldom matters who's footing the rest of the bill. Or how they are footing it. And, as much as it might help if you, personally, take these things into account, the vast majority of people will not. That business model is going to be here for a long, long time to come.
I do agree that the OGL is one of the best things to happen to this hobby, ever. But I have to notice that publishers are moving away from the d20 System, not towards it. Too many of them lose money on the deal, or don't make enough to justify the investment. It's becoming too difficult to get retailers to participate in shared liability. Sure, you can sell via Amazon.com, but as Amazon doesn't have the liability, your position hasn't improved enough to count.
Anyway, enough ranting on this topic. Apart from answering specific questions, I'm done.
RC