The counter argument of "whaaaaaa, that's not fair to middle men like meeeeeee!!" is to remind the dealerships that they can always leverage things like the First Sale Doctrine (which would at least be partially applicable to Tesla vehicles, because they use a LOT of software inside) to buy Tesla vehicles from either end users doing trade-ins, or from Tesla's store directly, to have them for sale on the lot.
What they DONT get to do, is be the exclusive source for those vehicles, or have the right to the lowest sales prices/highest profit margin.
There are any number of real situations where a consumer may be willing to pay a higher local price than they would have to pay at another retailer. For instance, Tesla may not want to install Tesla Motors stores in cities below a certain population density. (They arent pulling a Walmart here.) Or, they may not be willing to arrange trade-ins for not Tesla vehicles since their stores are not dealerships. In those cases, a consumer who only has a finite amount of expendable time may consider the time savings when purchasing to be of sufficient value to warrant the added cost of the sale-- Or may consider the added equity of the prior vehicle entering the transaction to be sufficiently great to nod at the nigher sales price for the Tesla vehicle.
The profit margins will naturally be smaller, and competition between dealers to better offer these "hot products" will further cut into those, but Tesla is by no means the ONLY retailer. They CAN sell Tesla vehicles, they just cant get them at deep discount prices and then jack the prices up 500%. What they CAN do, is become a Tesla certified/authorized repair/service center, then purchase and repair old Tesla vehicles for resale-- and purchase brand new Tesla vehicles from the Tesla store, and offer them at a modest markup (say, 10 to 20%).
But telling the actual TRUTH like that doesnt get simpering idiots in the electorate to sympathize with blocking Teslans stores, allowing them to retain the power to charge the 500% markup.
That's why they scream about how terribly unfair it is that they have to actually engage in market capitalism, instead of market cronyism.