Why do you think LP would be silly enough to sabotage the good thing they have going? They are not going to voluntarily give this market share back and as described above the manufacturers like their sales so they have no reason to force LP to do otherwise. They are merely paying lip service to their other dealers to keep peace. Every now and then they print a poster for dive shops to hang up that says they don't sell on the net, and they train their guys very well on what to say, but the hits just keep on coming.
LDS's can now compete fairly....they choose not to. If LDS's cannot compete fairly now, someone forgot to tell the guys at ScubaToys. LP is not the only business that is capable of doing what they are doing. They may be the ones with the head start, the first to execute the idea successfully, or maybe they are the ones with the most capital and can make it happen but they don't have an exclusive on how they do it. I'm sure if someone had the capital, the motivation, and the knowledge they could do what LP does or do something better. It's just a lot easier to blame business shortcomings on the market, the competition, the economy, the factory, the dealer agreement, bad publicity, bad location, non loyal customers, or whatever than it is to take personal responsibility and do something different. No matter how hard you want LP's deal to be illegitimate and for it to go away -- at the end of the day if you (closed minded LDS's) continue to do the same things, you are always going to get the same results.
I think Jack Welch (former chairman of GE) said "If you can't be number 1, you damn well better be number 2. Then when number 1 slips you will be there to take their place."