The margins on hardgoods are 40% or so, clothing 60% - and the clothing market is much larger than the cam market. REI's size allows it to negotiate sale prices that other retailers are unable to offer, in addition to the regular rebate, oh I mean "dividend". I'm not sure there are that many markets large enough to support a highend specialty store in addition to the volume play of REI. Seattle (Feathered Friends), Salt Lake City (IME, also next door to REI), and Boulder (Neptune) have all had some success I venture, while the Bay Area has seen independant shops (high end) disapear - Western Mountaineering, Skinny Skis and Sunrise are a few of those that have disapeared. Washington DC has seen similar carnage - the local chain (Hudson Trail Outfitters) will probably perish when REI turns it's death ray on DC.
Maybe I'd be proREI if they offered prices that were truly lower than available locally (like, gasp... Walmart does with consumer goods). I've found most every local shop willing to meet REI's sales (often have better of their own), give a discount comparable to the "dividend", and generally offer better service than the green goblins. REI manages to capture market share through the twin arms of worthless consumption - stripmalls and massadvertising.