One of the reasons some of us go to a LBS is for service and peace of mind. We might by a name brand because we have faith in it or because we like the quality of parts. For me it was the free service. The day I rode the bike home it was smooth, nothing squealed or squeaked and the tires had the right pressure. Now I know full well I could have taken the time to service the bike before I went on my first ride but I don’t think I ever got everything dialed in first time out like the LBS did. Free service for life was a drawing card for me.
I have nothing against department store bikes except maybe the quality of some of the components might not be quite as high as what I can get at the Bike Shop. But I agree with one of the posters that said with a department store bike you might be a bit less fearful about it being stolen. Not because it was less likely but because it wouldn’t sting as much.