"So you think eliminating a major component of profit and revenue from the integrator profession will make only the hardest working ones stay around?"
Yes, I do, mostly.
Go back to 2001 - 2005 and security integrators were flush with cash, fueled by dealer protected DVRs (which were a massive improvement over VCRs much more than IP cameras were to analog) and by the 9/11 response.
This made it easy for many integrators to be sloppy and stupid, rewarding slick sales types. The money absolutely came from product sales as 16 channel DVRs were ~$10,000 in those days and you would get a 100% markup on them. It's almost absurd to think now that someone could make $5,000 gross profit on a DVR sale.
Because of this, a good salesman, with minimal technical skills or staff could make a killing.
That's no longer the case. So I think it's a positive thing that tighter margins punish the sales types who added no technical value.
"The elated end-user, high after winning their Pyrrhic victory over the fat cats in the middle?"
To that end, I don't think it's a Pyrrhic victory. End users have definitely won by punishing / hurting the old school security integrator who was just pushing boxes.
"Try it with doctors, lawyers, waiters and plumbers.
See who sticks around and works for less."
The old school security integrator was typically not very skilled in computers, networking, IT, etc. The average tech back then had an electronics background and the average sales person not much at all. So those people, in 2015, have little choice as there's no hot industries looking for people with electronic repair skills.
Overall, I think the squeeze is good to push out the integrators who don't know what they are doing, who use their firms as cash cows with little regard to technology and technical skills.
Even with product sales, professionals can still make money though. Accountants, lawyers, consultants, etc. sell nothing but their labor but still manage to have upper middle class or higher lives.