Two hour delivery is expensive, and online stores are much harder to search and navigate than well-stocked brick&mortar (it's not impossible to do, but nobody does it).

In the end the cost for the person to pick up and deliver an item on demand like that goes somewhere and that in particular is something that doesn't scale away. The margin improvement from having a warehouse instead of a box store won't make up for that last mile delivery charge, especially when the box store can do the same kind of delivery and benefit from impulse or high margin items from in person shoppers.

Amazon is like wading through sewage to find what you want, and rarely if ever do you find something you weren't already explicitly looking for.

I completely agree with your point about brick and mortar stores. Having a showroom with multiple sizes and brands of product on display, and able to purchase on the spot is a great convenience over waiting for an item to ship. Yes, its a slight inconvenience to commute to and from the store, but it often beats waiting multiple days for something, and having no idea of its quality (or worse if you accidentally purchased a counterfeit product). After doing that a few times on Amazon, and having an issue with a return once, I have stuck to supporting B&M retailers, especially those like Micro Center who provide online stock numbers, indicate where a product is located in their showroom, and match prices (though I have mostly found Micro Center's prices to be the cheapest).

Frys offers same day delivery for free, with orders over $49...

https://images.frys.com/art/deals/tralfaz/Free_Local_Deliver...

Once B&M stores offer same day delivery its going to be hard to be an online store.