Mitch, I'm pretty sure you've nailed the reason for the insurance red herring. At Joes all tyre prices include "free" fitting. If you buy a tyre to take away, the price is the same, although you can sometimes negotiate $5-$20 off. If you bring one in the get fitted, you get charged $30-$50 (fitted a car tyre to a Rocket today for $50, no problem at all, by the way). He carries a lot of stock and noone needs to book in; just show up and they're fitted while you wait, usually within 30 mins and often a lot less.
At the moment he has a good margin on tyres so can continue to offer this type of service (and pretty much the lowest prices around here). BUT, and it's a big but, the more people come in the get their own tyres fitted, the more he's going to charge for that. One day, he'll get to the point where appointments will be needed and he might even give up on stocking tyres at all. Anyone needing a tyre in a hurry may well have to wait for one to arrive from overseas and then wait for fitting. Cost savings will be eroded by higher fitting costs and greater inconvenience.
You gotta ask yourself if this is what we really want. personally, I'd much rather pay a few extra bucks and help keep these type of operation running. Not for them but for me.
I don't blame these businesses being worried but the bull**** still pisses me off.