Technically, you are supposed to pay sales tax to your state when you buy something online. The responsibility is on the individual in this case instead of the store. Of course, when there is no auditing, people will chose to simply not pay the tax.
As for California, I suspect that our problems are much deeper than people buying online.
I do like to support local businesses because I prefer the attention to customer satisfaction that you get from a small local business. I find it is well worth the extra few dollars to be assured that you are really getting what you want.