Great thread...I'm glad that you brought this up, as I've been considering the very same thing. We're building a commercial building in town and if we don't get it rented out, I may open a store in one of the spaces. In my area, people are very environmentally conscious, so I would stock only organic fabrics, battings and thread, locally dyed yarns, beautiful, handmade gifts, vintage sewing machines, notions, etc. These are items that are hard to find online, would reflect the local interests and cater to the tourist trade. I would also off lots of free classes to get the locals interested in quilting, as well as top quilting instructors for paid seminars and retreats. I'd offer wine 'n quilt tours and have a host of B&Bs ready for tour groups.
Still, all that being said, I think it would be tough to stay in business, especially if I were depending on just the locals. The store would have to be a destination. An online presence would also be necessary. I'm already experienced in owning a retail establishment, but if you've never done that before, take some classes. It's very easy to lose a lot of money in the retail trade, especially now, with the economy still lagging. It will take lots of money, being very brave and the willingness to spend long hours in the store during the day and behind a desk in the evening. But, if it's your passion, go for it and never look back.
Good luck in your venture!
~ Cindy