Certainly it is never good to see what many regard as a fixture in model railroading (or any other worthy thing) bite the dust, and its ripple effect can be felt even from a distance, at times, but:
I, like most of us, live in a area that has no "LHS", hasn't for years, and never (again, like most places) had anything like Caboose Hobbies, or its ilk.
But - I never went there - or many of the other "nationally" famous shops, and have gotten along just fine - too fine - in the hobby. I recall ordering exactly one time from Caboose Hobbies, it seems - what, I forget; long time ago - so I can't say that I'll "miss it". For most of us out here it came, it went, like everything else. And Denver is 2000 miles from me (Denver is 2000 miles from a lot of places...).
Not a good thing, but not a surprise.