They aren't really taking advantage of you, IMHO we are too used to super-cheap online prices and then we feel ripped off when we see something being priced higher. It's hard for stores to compete with online prices. That being said, I'm not going to pay $20 for a $5 bottle of prime just because it's a local store. You do have to draw a line. But, I think that higher prices should be expected when buying locally.
I do agree with this, however sometimes the difference between an online and a store price is so different it really gives me pause. I think we are being naive if we believe that they couldn't back off of their prices on some things like that 20 dollar bottle of prime that is 5 online.