I think this is an interesting discussion, simply because many of us are at different extremes in the way we choose to approach this issue.
KenB, I get your point about a 'free market system', but there's a difference between selling something that requires zero maintenance (and almost zero knowledge), and a higher end product that requires both.
However, there is nothing wrong with distributors having rules, because it's THEIR product. If you don't like those rules (including pricing), then don't sell their products. The VERY reason they do this is to keep the 'cut throats' out of their supply chain, because those people end up out of business, leaving a chain of unhappy customers in their path for the manufacturer AND remaining dealers to have to clean up after.
Another issue for the cut throat merchant will be that the customer which lowballs your price into the ground will STILL expect top-notch customer service, which you simply can't provide if you aren't making decent money from a product. These are the customers that usually end up requiring the most 'hand holding' after a sale, and the ones I've seen turn the cut-throats into very bitter business owners.
Based on two decades of dealing with this (and over a decade online), I'm going to stick with the final statement from my previous post - as these as the two situations I have (sadly) watched cut-throat competitors get into over the years:
If the only thing you have to compete on is 'lowest price', you'll either be nothing but a memory in a couple of years, or survive but be completely MISERABLE because the only customers YOU have are the ones that the rest of us don't really want (whiny, disloyal, etc).