Of course Amazon has cheaper prices. Amazon is just a collection of third party retailers who don't need any more physical presence than a warehouse and can operate entirely as dropshippers, whereas Babies R Us needs to have far more employees to fill roles like cashiers, customer service, stocking, logistics, purchasers, marketing/advertising, loss prevention, and janitors,and that's before we mention the rent/utilities for the locations. Amazon was cheaper because they don't have the costs associated with maintaining a physical presence.

What you call "gouging" is what the rest of us call markup, because we understand that a store needs a certain profit margin to operate.