Steve,
that was a very well-written and thoughtful comment. However you are failing to consider two important points:
1. Apple's retail stores are useful regardless of whether or not they make money due to their ability to get Apple products into the physical hands of shoppers. Out of sight, out of mind.
2. The complete lack of shelf space in existing retail chains made these stores necessary. No doubt this was due to Apple's dismal market share, which created a vicious cycle resulting in ever decreasing shelf space. Ironically, now that Apple's market share is rising (due in no small part to the stores) the larger chains are once again interested in carrying Apple products.
You're right that retail almost always fails, ultimately, but in the meantime, they will play their part in increasing Apple market share, which experts now say should be well over 10% within the next year or two.
Lastly, you sound as if you are actually hoping that this happens. If that's true, then you're just being silly. the market is far better off with multiple strong players. Without Apple, it's a safe bet that Windows would be less than it is today and the same goes for Apple.
The Genius of Apple Stores