Fascinating thread. I have to say, out of all of the gaming stores I've visited, I've only encountered a *tiny* handful of people at any of them that I was comfortable spending time with, or interacting on any social level. The bulk were of the fat/greasy/unkempt/unwashed/loud/obnoxious type. This may not be a popular statement, as it seems dangerously close to a rude stereotype, but it's the flat truth. I can't get several of my good friends to go near the stores (and truth be told, I don't much enjoy going there myself for the most part), and myself and my friends *are* self avowed geeks of various sorts (be it computer games, cars, music, or something else). The people that I've encountered at the gaming stores were largely so unappealing that I would be embarassed to have my girlfriend drop by.
So that's one major problem. The other is obviously price (which has been gone over in detail in this thread, so I won't harp on it much). I can buy the three 3.5 core books on [online store of choice] for ~$60, or I can buy them at LGS for $120. Similar price differences for other products. For me at least, the intangible added value that the local store can add simply isn't there. Without a different staff, clientele, and atmosphere, I'm not going to spend my money or my time there, and I'm not going to bring my friends there either.
This conversation reminds me of similar discussions one of my friends told me about, with the US arcade industry dying, and arcade fighting game fans flocking to online sites and organizing regional tournaments to keep playing (eg,
www.shoryuken.com). The parallels are striking - they complained about smelly, dark, unpleasant arcades staffed by incompetent employees and frequented by rather unsavory types, and the industry was killed by more cost effective versions of the same games that could be comfortably played at home. The similarities only run so far, but I definitely don't see roleplaying croaking completely because LGS are going out of business for one reason or another. Small niche markets with intensely loyal customers tend to stick around in one form or another, and the internet is empowering to communities of any sort.
I genuinely wish I had a nice local gaming store to frequent, but for me, it's a mythical beast. I'll probably just keep ordering games online and playing them with friends.