Don't question the antitrust authorities: Offer your price too low, you're doing predatory pricing. Offer your price too high, you're gouging your customers. Offer your price the same, you're colluding. You're evil, and should be eliminated.

I think there are a whole bunch of reasons for the success of Wal-mart, with perhaps the reason Wal-mart itself offers is because they have so completely optimized their distribution system that the cost of shipping product to the end-consumer is so cheap (per unit) that they can undercut all of their competition.  That is something the "mom and pop" stores hate to hear and it is something hard to compete against to when Wal-mart can continue to sell items at a retail price making a profit at prices lower than most stores can purchase products for at a wholesale price.

Yes, there is bullying of suppliers for deep discounts and other factors there too which make other merchants angry with Wal-mart, but without that logistics system they've built it wouldn't work.  When you can buy bottled water at prices cheaper than you can pay for it out of your faucet, it becomes a huge concern.  No, Wal-mart isn't there yet, although I've seen proposed water rates by the municipal council where I live which would make it so.

Customer service is a part of the overall picture, but I will note that I don't consider Wal-mart associates all that friendly or pleasant, and requests for special products or for that matter even finding something they had for sale six months ago is often very difficult.  Wal-mart takes care of the main bulge of what most of its customers want, but they don't take care of the "long tail" very well.  Amazon.com, on the other hand, does go after that "long tail" perhaps to a fault where books which have been out of print for 30 years or more can be found with that business.

Regardless, you overall thesis is sound and businesses who listen to their customers are ultimately the ones who profit.  The "wealth", as such as it is, can be found with the service that they provide where access to those services is the true wealth.  A place without a Wal-mart store likely has overall higher prices in their stores.  It also makes those "mom and pop" shops to really have to earn their prices by being extra kind to customers, doing those special orders and filling niches that big box stores like Wal-mart won't provide.

I agree but not entirely. By the way, where do you pop such numbers from?

It is true that if a certain market remains very lucrative for a long time, it is quite suspicious. One may say that there are artificial (coercive) barriers to entry in such market, protecting those who are already in. Banks are a good example. But that's not always the case... there are historical cases of companies capable of maintaining competitive advantages over everyone else for years.

Saying that in a "perfect market" profit margins tend to zero is too strong, and not true... if a particular market start to have lower profit margins than others, providers will migrate out of this market to those more profitable, what can stop the decline of the profit margins of this market. The "total average" must be positive as well, it's not a zero-sum game.... profit = wealth creation, and people are always looking for ways of creating more wealth. Free markets are good to everyone, providers and customers...
Instead of saying they "tend to zero", you could say they "tend to an equilibrium", which, of course, will never be reached, since society is always changing.

Pretty much every big company that we think of probably distort the market in some way.