Lets clear a few things up...
There is the internet (legit shops and dealers etc...,) then there is the internet (Ebay, Scam Artists etc...) then there is Internet (retailers selling gear - like Amazon.com etc...) In all of that there is good and bad. Then there are specialty gear internet shops/ retailers... like say you're looking for an Underwater Digital or film camera or a video set up. Would you really pay a shop double for a Sea & Sea camera that you can get at B&H? If so, why?
I've bought thousands of dollars of gear on the internet... from LeisurePro.com, Divers Direct.com, Scubatoys.com, DiveUS.com, ScubaDestinations.com, Scuba.com, poseidonadventures.com etc... and I've been thrilled with every purchase. I have saved money, got my items quickly and without hassle and in most all cases with a full warranty.
I have also bought many used items from people on Ebay... and I have been thrilled every single time. I've gotten quality regs, BCD/s fins etc... The key is being an educated and smart Ebayer. Don't buy from people with 0 feedback or a bunch of negatives. Also be leary of buying from anyone who has a lot of positive feedback from the same buyer. This shows as fraud. Don't buy from anyone with lots of great feedback but all of it is so old you can't click and see what the items are... these are often fraud Ebay'ers that somehow hijacked a good name. There are tricks and tips all over Ebay's chat and postings... educate yourself before buying.
It is no secret that the industry is in trouble... and bigtime trouble at that. I was just talking with a senior executive for a major training agency that goes to the RSTC meetings... according to her, much of the industry is shutting down. Shops are being lost left and right and in Europe, some government agencies are looking at pulling the training licenses of PADI & SSI because their new dumbed down programs do not meet safety standards required by the governments - in particular Germany has put them on notice.
The industry and in particular SSI and PADI executives have turned a once proud sport into a money making capitalist disgrace... short on standards and long on profits.
While this may seem to be off subject... I argue it is point on. Far too many dive shops have been opened to support the industry as it should be. They were opened by capitalist looking to exploit an industry. The shame is that many people were duped by the major agencies into believing this was a big-time profit opportunity right near the dawning of the internet taking off. The agencies pushed people and supported people opening shops because this would allow them to sell, sell, sell their training materials and make off with the real money... all the while leaving the shops to struggle as pawns in the game.
I suspect that shops that have been established for a long time and have continued to offer exceptional service and value will survive... but all the newer shops that burgeoned up in recent years and do not have strong client bases and long term vision will go the way of the dinosaurs.
While I do not ever favor government intervention, I see it coming... not so much because the industry as a sport needs it... but because the greed of the major agencies and their disrespect for the tradition of the sport will force the governments hand. Lucky for Scuba in this country - that our goverment currently has far bigger fish to fry.