In defence of the LBS...
Saying they're all crap is a bit like saying all resturants are unhygenic. Having worked in a lot of resturants and bike shops, I can say that there is a grain of truth to both assertions, but in fact most places do a really good job.
Rates for mechanical services run are $60/hr at the place I currently work at. Pretty reasonable considering a good (skilled) mechanic earns roughly $30/hr. Add super, workcover, rent, tools and workshop expendables that dont have an additional charge (grease, rags, degreaser, etc.) and the boss is making SFA from that. Plenty of work is done for free, particularly on nicer bikes and on more complicated jobs. A basic service ($60) ususally takes less than an hour, which is why interesting work is done cheaply or for free, but if you can't clean your bike and lube your chain and cables (which is what 99% of basic services consist of) then you probably aren't too concerned with that.
3 of our mechanics have been at the shop for ~8-10 years. One is a qualified motor mechanic, another does some seriously mind-boggling stuff - for example, last week he made a rear mech hanger from scratch for an overseas rider who was in town to race for the week and who didn't have a spare hanger. Hangers for their brand of bike were unavailable locally. 2 of our mechanics are younger, both "DH kids" but both really good. One of them built my touring bike, which I will take riding overseas, in isolated areas, for a year. If I didn't trust them 100% then I would have paid full price to have it done elsewhere. Everyone learns. Nothing leaves the workshop that isn't done to the highest possible standard. Nearly everyone could be earning more money in lines of work they are less passionate about, myself included. I have a Masters Degree and speak a second and third language.
LBS staff cop a bad wrap online. When people come in with a tech question, they normally do so because they have searched to internet to death, and still have no idea. They've also normally botched a job themselves and want the LBS to pick up the pieces - they normally expect this to be cheap and easy. Most people that work in bike shops do it because they love to ride, however, most of our time is spent answering questions about ~$600 hybrids that, quite frankly, nobody gives a damn about. The good deal of customers get stoppy, often to the point of anger when they ask if one kids bike is better than the other, and the answer is "they're pretty much the same". They then ask for discount on products (like kid's bikes) that we don't make any money on anyway. When the answer is 'no' they get indignant. It isn't our fault that campy changed their cassette spline and that, after 8 years you need a new groupset.
When someone comes in, with a component that was made before I was born, wanting a random bearing, o-ring or seal (or whatever) that has to be special ordered and costs $2, of course I am going to have to look up information and get back to them. We can't know everything about everything. Most people who come in wanting small parts (which we can't stock all of, and which online stores don't even sell) are basically keyboard warriors who know everything about one thing. Unfortunately we have to deal with questions about everything from high end electronic groupsets to different types of loctite to our deepest opinions on kid's helmets. With the profusion of the internet, everyone seems to think themselves an expert. This week I was asked my technical opinion about the campy electronic groupset - never mind that it is still in prototype stage, and only campag engineers and team movistar mechanics have seen it!
I spent an over an hour today talking to a customer who's pedal force (ie, POS online frame) was creaking. He wanted everything short of a rub-n-tug from us. We saved him hundreds of dollars of buying crap from the internet that wouldn't stop his frame creaking. A new set of speedplay cleats fixed all his problems: total profit from sales: $19, cost of my time serving him: about $40. Amount of time we saved him pulling his bike to pieces: ~10 hours+. Amount we saved him in part from the internet chasing down mystery creaks: atleast $200. His comment: "these cleats are cheaper online, can I have any discount?". Unfortunately, like there are bad shops, there are bad customers, and bad people.
I am more than happy to pay for my hobbies and have never asked for discount. I regularly buy things from shops other than the one where I work becuase they are good at what they do. I am happy to pay skilled labour rates for skilled labour. That said, we all like the jobs we do, and could all earn more working in other industries. I've never been a sponsored rider. I get staff discount just as pretty much everyone gets from their respective workplace. It just so happens that my work and one of my hobbies intersect one and other.
I could go on all day, but the basic gist of it is that there are good bike shops and bad, just as there is with everything. Finding a goodie is worth its weight in gold, and using them regularly will save you both time and money. Find a good shop, be a good customer: it really is a win-win relationship.