The 1990s LGS model, by which many LGSs are modeled, is not going to survive the Amazon onslaught. Instead of attacking WOTC for what looks like a very pragmatic, and even forward-thinking move, we should ask LGSs to evolve out of the 'game tables and water bottles' era.
I think WOTC is making the best move they can. Amazon's logistics and willingness to take short term losses for market share have worked well for the company. Why fight a losing battle and defend the outdated LGS model? It's way smarter to have a balanced approach (which is what WOTC is doing) by throwing LGSs a few bones while their ranks thin to the new LGS model (where all of the profit comes from food and entertainment and not from selling packs), and get direct-sale profits out of Amazon.
It sucks for LGSs, true enough. It does. I used to go to bookstores. Now I don't. The new model is at the home tables of casual players. It's no surprise that four-player Commander is such a huge success. I am sure WOTC ran the numbers and realized that the LGSs and even competitive play account for small percents and the lion's share of profits comes out of retail direct to casuals.
Movie theaters have already made this evolution. Now you go to a movie theater and can sit on a gigantic sofa. The new LGS will be an entertainment center, a leisure center, it will have great food, even TVs showing competitive coverage. You can go there once a month and have an experience.