While I would most likely get my next bike at LBS or one of LBS online, for a beater or rather short term use, I personally don't see a problem with department bicycles.
I remember seeing couple of bicycles @ Costco but I think most of costco only has one with shock mounted seatpost.
Probably better to go Costco or Sams club since they have great warranty and return policy in case it doesn't work as intended... (very limited selection of course).
Quite honestly, the negative feedback on department bicycle to me is like.... buying preconfigured computer argument. From Computer aficiandos... department computers are ALL junk. Fact is, well, they work just
dandy for over 90% of population it seems.

ps) Performance Bike is good choice. Their 20% off just passed though... they seem to have sale very frequently and do carry some "lower end".