Much of this argument only holds true if you assume every LBS is a race
organizing, trail funding, bike demo-ing, and generally angelic business. The
fact of the matter is many (or in my experience, most) bike shops just suck.
I used to work at a major bike shop chain in the Northeast. They dealt Trek
and Specialized, as well as some smaller companies. Despite being a major
shop, the most you could demo one of their bikes was by just riding it around
the parking lot. And that was only if they had it in stock-most of the time
the bike you wanted would have to be special ordered, and if you did that you
had to commit to paying for it before you even could touch it.
Most bike shops are like this. They cannot afford to have every model they
sell in stock or for demo, so if you want it you have to pay at least a
significant deposit before they'll order it for you. And if you demo it and
decide you don't want it, they're stuck selling what is now a used bike.
It's time to cut high-end bike sales out of the bike shop.