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There are independent bookstores in the US. Heck, there are even some in major cities. I can think of a few in DC. They are there because they provide excellent service, great programs, and the people in the area can afford the slightly more expensive prices. The people in those communities have voted with their dollars. Borders is gone but some Independents survived. The system works.
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THere is really no doubt but that Amazon poses an even bigger threat to independents than the chain book stores ever did. The " showroom" effect is real . People browse the independent's bookshelves, accept the help and advice of their staff, then go home to buy from Amazon, even telling the book staff that they are going to do so.
Faced with that, its difficult to figure out how the independents can survive, and merely asserting blithely that "the system works" aint cutting it.
Frankly, I don't know how the independents can survive. Its a difficult problem and it can be argued that the online booksellers are unfairly benefitting from the efforts of independent book sellers to provide a great book browsing experience, therefore something should be done to tilt the playing field their way. What that something should be is the question.