They are an LBS, always have been. They decided to invest in an online presence and worked hard to make it a success. That involves making it competitive.
There's nothing preventing any other LBS from attempting the same, that's how competition works.
And wiggle started off as an LBS in 1995?
When it comes to undermining pricing and making life hard for the LBS -
Sigma are right up there. Not sure how you can argue otherwise?