One thing you have to keep in mind about the difference is the buying power of the stores. Wal-Mart sets the price they will pay for specific products, so their prices are usually lower. The smaller the quilt shop, usually, the higher the price.
There is a LQS in San Diego called Rosies. Most of the fabric is under $10 a yard, but her store is HUGE.
I don't know what is driving the prices of fabric up. It seem like when Joanns brought in their summer line, all fabrics jumped at least $1.50 -$2.00 a yard. Even the employees were questioning the jump. Maybe just taking advantage of the consumer? I would love to know what it costs to produce a yard of fabric.