Personally I think people are just not ready to accept the fact that high overhead, low margin, stores like bookstores are a dying breed and not likely to survive long term. They are on the short end of the "innovation" stick and it's only a matter of time before they become extensions of their profitable online counterparts or go out of business. They require too much of a footprint for the small profit margins. Between amazon and ebooks, the traditional bookstore is the buggy-whip of the the 21st century. With the death of the traditional bookstore will also usher in the death of the traditional publishing conglomerate and I will not shed any tears for those rentiers.
Personally I think there is still room for retail innovation, but people have to be willing to think outside the box to make something great. Think the best of the coffee shop, tiny lending library, amazon kiosk, and/or on demand paperback printing. Something that adds a tiny overhead to the profitable coffe shop model while adding the best points of the bookstore. Heck, work with local government to partner with the library system so that you don't even need to own the lending books.