The vendor often isn't even getting that 2% anyhow - it's dead losses from cash-handling expenses and employee theft.
Not if I shop at cash only places.
Is it feasible to do this all the time? No. But quite often it is.
I personally believe most of the "cash only" places (or places that beg you to pay cash) only do so to get out of paying taxes. It's a lot easier to underreport your income if your whole business is cash.
Many businesses are cash-only because they had so much credit-card fraud associated with them that no merchant bank is willing to process their payments.
That doesn't refute the argument for having and using a credit card for places that do take credit cards, when you inevitably run across one of them.