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"In effect, B&M stores have been giving a huge, inadvertent subsidy to online stores the entire time and I can't help but imagine that's what's really crippled their businesses."

True, but on the other hand online stores subsidize B&M too. I've often looked at the ratings on Amazon and then bought something at a B&M because I wanted it right away or wanted an easy return, if needed.

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I imagine the cost of developing and maintaining an online review system is relatively trivial in the overall scope of running an online business. Your example is just online vs B&M competing on their own merits. OTOH, it costs real money to hire knowledgable salespeople and real estate for attractive displays.

I don't know if this is a causal relationship but I noticed companies drastically cutting back on the quality of salespeople around the time online shopping became big. This would make sense economically as stores could no longer capture the full economic value of good service. OTOH, for vertically integrated stores like Apple, the incentives are aligned and the quality of staff is noticeably higher.

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