Many people think that something's good for them when its really not.
This is one of those situations.
The LDS can't "protect" their business. Oh sure, they can sell a few things to a new student, but that's it. Once the student figures out that they just paid twice for something, unless there's a real good reason for it (like some kind of simply OUTSTANDING service policy) they're gone on the equipment sales side, never to return (and likely to be rather unhappy with that shop)
The manufacturers can't stop it either - at least those that mass-market can't. Halcyon can, simply due to production volume - there's no incentive to backdoor deal those products.
But the others? Forgetaboutit. The manufacturer cares about only one thing - how many they sell. They couch the "no discounting" stuff in a way that sounds like they're protecting the LDS, but in fact they're doing no such thing. The backdoor sales will never go away, because these manufacturers are volume-based.
So the LDS' lose at least twice and perhaps several more times. They first lose the respect of the customer, who finds out that the so-called "price stability" is nonsense and they can buy from LP or DiveInn. They lose again when the LDS tries to disclaim the warranty on the LP or DiveInn product. Then they lose AGAIN in that those sales are forever gone and as soon as I buy my first thing from LP and the transaction is just fine I will never give the LDS any more of my money for equipment subject to their 'price controls'.
Look, if you were a local dive shop, which would you rather have?
A sale at $25-$50 over LP's price for a regulator, or no sale at all?
If the sale is at a price over your cost, and the alternative is that I buy it from DiveInn or LP, then your choice is not so simple as "price protection." Now it comes down to whether you want any of my money - a much, much tougher decision.
Only a fool tells me to take a hike in that situation.
The LDS could easily revolt if they decided to. The better question is why they don't....
There are a lot of fools in the LDS business...