Some good points here. Yes, perhaps you should pay a little extra for good service, but guitar shops have a pretty poor rep on customer service. Even then, how much should you pay? I remember once going with a friend to look at an LP standard in a local shop. It was about 2004 I think. It was a 2001 spec LP, but they'd got the RRP for a 2003 spec on it (which was several hundred pounds more). I think they'd got £1,899 on it, and at the time people like GAK and Andertons were offering 2003 specs for £1,200. So, this guitar was at least 2 years old, end of line, and overpriced for that model. They'd only come down about £100 on it! Needless to say it remained unsold, and I believe was still on the wall 3 years later when the shop closed down.
The internet is here to stay, shops need to figure out how they're going to continue alongside it. Offering a basic £30 setup with new strings which it only needs because it's been on the wall for 6 months and played by 20 teenagers every Saturday really isn't going to cut it when you're charging an extra £150 for it. If you buy a Dean, Washburn, PRS or some others, they come decently set up out the box anyway. Lack of range is another problem. When a shop's only got 5 guitars I'd maybe consider playing, the internet is much more appealing, and really what kind of service can they offer me if there's no real decisions for me to make?