There's also a "saturation" philosophy to be considered (what bluestang50 refers to):

"I can create a lasting/lifetime relationship with a customer by treating them with respect and giving them the deal I would want for myself - OR - I can gouge all of the customers in an base/area ONCE and then move on".

Which type of dealership do you want to
1) work for?
2) do business with?
3) own?

With the exception of "recent brands" (like Kia, Hyundai, Saturn, Lexus, Infiniti, Scion, Hummer, etc.), most of the dealerships in my area are long-term / family owned. Maybe that's because there's enough population to warrant multiple dealerships for each brand with "competitive pricing" and "honest service" playing a large part in keeping them in business - maybe more than "convenient location" or "being the only game in town".
With the internet playing such a large part in nearly every business now, people are more willing to look for a better deal a little further away than if they had to do all of their research by "foot traffic".

In a society that wants "instant gratification", it's not surprising that there are still a few who are too lazy, ignorant, or intimidated by dealers that they'll get harpooned without much resistance. Fortunately, they ARE few and far between - at least more so than in the past - and the "gouge'em" dealerships have a much smaller customer base to victimize.

I understand that the prices is always what the market will bear. I also understand that people buy a car because they WANT it OR they NEED it. The Challenger is a "Want it" car. I WANT it, but I'll wait until the "market softens" and I can bear the price.