With gas prices headed for $4 a gallon, and diesel already at $4 a gallon, you should not be shocked that the price of everything is going up! It is far from over! This is the time for y'all to be making scrap quilts and doing the Quilt Challenge for 2008!
I believe most of Joann's fabrics are PB Textiles. I know that a lot of their fat quarters are, and the quality is not that great on many of their fabrics, even the $6.99 a yard stuff.
When you shop at a big store like Joann's you are paying for freight (diesel gas, not unleaded,) salaries, insurance, utilities, advertising, and lots of other costs that you are not paying if you order online from a small shop. A lot of the shops on the FabShopHop seem to be out of private homes. Those owners have wholesale or retail licenses, so they get to buy bolts of fabric from the manufacturers at very low prices. Same prices Joanns gets, but without the overhead.
Like Patrice said, even with shipping, you are going to pay less doing business with a small business owner.