i would have bought the knife. i think that it is important to support locally owned shops, particularly in one's neighborhood. i recently bought an item from a local store that i know i could have gotten for half price on the net. it didn't bother me in the least because i feel like it is putting money back into the community in which i live.
a store like that in solvang depends on tourist dollars like your own, and fwiw, i think you made the right decision letting your wife buy you a knife there.