One thing that they LQS owners have to do is keep up to date. It isn't "our obligation" to keep them in business if money is the bottom line. IOW, if we want the money to stay in our pocket, we don't have to pay the high prices. But, of course, the result might be they go out of business,
HOWEVER, it sounds like your LQS is adjusting--she has more places for people to sew, etc. She probably makes money somehow doing that.
Many times people here in Poland think that they are "obligated" to keep every little store in business when the owner hasn't a clue about capitalism and the way it works. Sometimes they just need to go out of business (I'm talking locally here--not your LQS). The successful business owner/entrepreneur will find his/her niche and fill it. There are many things a small store can do better than a big one, and often, that personal touch is it. If that is worth it to you, then go for it.
We all have to adjust for tougher times economically--we do what we can--whether it is cut out going out to eat (if restaurants go out of business, does anyone care?) or eating cheaper cuts of meat (if meat producers go out of business does anyone care)? The bottom line is, you care more about your money than anyone else. Spend it however you want and don't feel guilty because of your choices.