I think you are correct. There was a time when Amazon was almost always the lower cost option. Now that is almost never the case. While in many areas they are still cost competitive, now more often than not their prices are higher than what is available directly through other sites.
Right now...J C Pennys is at a all-time low price on stock. What Wal-Mart should do is walk in, buy the the chain (especially with their IT division), and then market the clothing within Wal-Mart.
There’s tons of ways to put heavy competition on Amazon and really force them to cut prices.