Is the LHS still viable , to point, yes, and to a point no, before the Internet, the LHS was the only place that us modelers could a lot of our supplys, and maybe if you had a decent ran LHS, even get aftermarket items,( not forgetting about the imagine adverts) but not every modeler reads model magazines. But now we have the Internet, where 24/7 365 days a year, we can shop for everything we may need for are modeling addiction , even do it in our undies , there is no need to get in the car, and drive to nearest LHS, a few clicks of the mouse, and in a short time, your stuff is being delivered to your door( probably shouldn't answer the door in those undies) .
And most of the time, you can get everything you want for a little cheaper then what the LHS sells for, and in some states, plus sales tax, and most LHS can not compete with the cheaper prices that can found online, not with the over head it cost to run a LHS . And I think that might be the downfall, just like with a lot of other small mom and pop business's.
I do think in some ways that the LHS is still vibale, there are things that are more cost effective to buy locally , like paints and things of that nature.
But then not every LHS is equal, there are some great LHS out there, and there are some not so great LHS , some are well stocked, and will bend over back words, and there are some that act you are bothering them when you walk in the door, and have never heard of restocking, so its going to I think come down to a survival of the fittest , and the ones that cater to their customers, and keep a well stocked store, and will go out of their way to make the customer happy, might have a better to chance of keeping the lights on for a while longer. Of course there are always variables so we have to keep those in mind to , and I am just talking about from the running a business side of things.
The other thing that might and most likey will keep the LHS viable are the ones that cater to other hobbies, like R/C, but the down side is , R/C seems to always take priority over static plastic models(not at all LHS) , and I think in most case's that for a LHS to stay viable, its gotta offer a little bit of everything to keep the doors open, as the days of just a plastic only hobby store are being coming very numbered, of course, this is just my opinion and I could wrong.
I dont want to say that one day they may no longer be viable, but I think the writing is on the wall for a lot of them, but again, just my opinion