I personally haven't noticed any decrease in the number of local merchants willing to accept AMEX. I have also found that web merchants who don't accept AMEX are the exception rather than the rule. I can recall only one such site in the last year. Same scenario. I'm ready to buy and at the last possible moment discover that AMEX isn't accepted. I didn't buy from them either.
I am not a merchant but what seems like common sense to me is that making a sale is better than not making a sale. If AMEX transactions cost more then figure out a way to factor it into the overhead.
I don't want to sound snotty, but I'd be surprised if Loomis House is doing so well that they can afford to turn away potential buyers.