I don't think that's what ILTB-2 was saying.
The quality might be worse, but it's the features that make a bike useful for transportation. If Wally World offered bikes with appropriate features, I agree that others like LBS's would follow suit. It's flat out amazing that they offer such inexpensive bikes up for mountain biking, which have lots of features for that. I bet they could offer up a decently equipped transportation bike for $100 if they wanted. Even a single speed would be nice, if it came with fenders, a rack, kickstand, and bell. It would be useful for students. But they don't.
Target at least does sell cruisers with fenders and chain guards. It looks like they have eyelets for racks. I've also seen them at bike shops.
My impression from ILTB-2's postings is that he's not terribly concerned with what's sold an LBS because most folks don't get their bikes there anyway.