I don't see how a LGS can keep the doors open on transfer fees alone.
They started the business to make an income, it takes selling retail to do that. Look at the hullaballoo the Club stores got into trying to sell cars - at remarkably reduced prices compared to the dealers. The dealers fed back to the makers sharp and quick they weren't getting stuck for warranty work when they didn't even get to sell the car. The makers shut down the Club access, end of game.
I've had the same difficulties in commercial hardware - some vendors claimed that the business I worked at was an authorized dealer, when in fact, they would sell direct to just about anybody who met the minimum order. One or two of those transactions were more than enough to realize their was no profit in being a middleman when the customer would start dealing direct after the first sale.
It's how gun sales are set up - by law. It's a distributorship arrangement, and frankly, if an online vendor can't ship direct - like the AR lower maker who shipped to my FFL - then the FFL has every right to make profit on the transfer. He is only making a few dollars on the lost profit he could have made had the item been on his shelf - I paid $49 for a lower the LGS wanted $130 for. A $45 FFL transfer was still a good deal.
If a LGS won't accept guns in from a major internet seller, it's called competition. Bud's isn't operating a brick and motar storefront within an hours drive of anybody, they discount their wares because they can't compete on anything but price. If the FFL's are freezing them out, it's fair play, just like the dealers freezing out the Club selling cars.
It's really the American consumer who bases every buying decision on the Low Price Guarantee who will eventually suffer. No service is a large part of the deal, and when you need a warranty exercised to fix a problem, can you get it? It comes out of the profits of the retailer and maker. The wholesaler who sits a few states away isn't going to lift a finger.