Case by case (or part by part?) basis here. My LBS is great with the walk-in "I broke this, can you fix it real fast?" stuff, and they charge fairly for it. Tires, tubes, bags, blinkies, and other little odds and ends are on par with the world, maybe slightly higher, but still within a normal expected range.

But parts? I can't rationalize it, despite their service. Case in point, Ultegra 6500 9-sp rear cassette. Can be had anywhere online (or big-box bike shops) for $70. They wanted $149.99. Shimano budget MTB pedals, $35 online, they're asking $65. DuraAce brake pads, $10-12? nope, try $29. Some markup is alright, and I'm all for helping the little guy- but not by handing him my AmEx card and letting him go wild.