Booksellers are not the only ones suffering in this economy, not by a long shot. To expect or think that the government will subsidize all of the small businesses going out of business is ludicrous. Government isn't doing so well itself.
Yes, of course Amazon is a huge factor. Who doesn't want to/need to save money? If I see a book on Amazon for 16 USD [more or less], and the same book is 20 USD [with member discount] at Barnes & Noble, and at the independent book seller for the full price of no less than 25 USD, who do you think I'll buy from?
That's not even taking into account the Amazon Marketplace prices. Now, there is a way to support small independent booksellers, buy Amazon Marketplace. Some of those are private sellers, but a huge percentage small used book stores, independent? Yes! Even counting the shipping fee, that can be a huge savings, plus support small businesses.
If those independents do not evolve, they'll die. As simple as that.