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I think it's not that distributors are outdated, but HOW those distributors operate is outdated.
ie:
Not taking Credit Cards, or making it hard on the buyer to use it (cash discounts).
Existing as a commodity business (letting a customer call around looking for the best price on a machine, because that's the only thing the customer can tell the distributors apart)
All competing for the same buyer and not expanding their own market
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