Bookstores offer something electronic media doesn't -- discovery.
1. You know what you want, you search for it and order it.
2. You know vaguely what you want, you search, read reviews and order it.
3. You walk into a bookstore and wander around and eventually pick something out.
I just haven't seen #3 replicated in online fashion. Sure there are a million sites that will guide you to what you want, but you never quite find yourself in an odd section of the store, pulled in by something you would never have tried before.
More than anything else, I think this what people miss. They don't want bookstores to exist just because.
Depending on how old you are, there is a big difference between the big stores now, and the same stores just 20 years ago. They used to carry a much larger selection of actual books. My local Barnes & Noble has huge sections dedicated to toys and other things where books used to be. On the actual shelves that remain there are fewer books, and far fewer mass market paperbacks. The latter having been replaced by the more expensive trade paperbacks. The books they do have tend to be on the very popular end -- something which needs far less discovery. The library depth they used to have is gone.
This leads to two bad experiences that we didn't use to have in the big book stores. You want something simple that should exist -- Tom Sawyer for instance -- and you might only find the trade paperback for $13.95. But you need it for school and it's too late to order, so you get gouged. Other times I'm looking for a book that would have been in the back catalog but isn't any more. They will helpfully offer to order it for me -- at a higher price and longer wait than Amazon, other retailers, and frequently B&N online as well.
I get they want to carry less inventory. But the whole point of a bookstore (to me) is the wide inventory of books I don't know I already want. If it's a matter of just books I know I want, I don't have to go to the bookstore.
I keep going and I keep hoping, but those days appear to be gone. Good luck to Powell's if they have a better store than my local B&N.