That flaw is also the root of the "Innovator's Dilemma." The idea is that "best" business practices and especially concern over lower margins and smaller markets, prevent companies from moving downmarket, leaving a gaping hole for an upstart to gain a foothold and eventually mount a fatal attack from the bottom.
I don't think the innovator's dilemma applies as much to a mature markets that aren't growing like is the case for many of these examples. There is not much room to innovate in the low cost urban grocery store industry. Even Walmart has been very slow and cautious to enter that market while taking on almost every other sector of brick and mortar retail in the US.
