Yeah, I really hate seeing that too. What I have noticed is that the situation is similar even in lfs, at least near me. Usually a little better, but still tight and not usually super healthy. I think there must be a few suppliers that sell betta to all the fish stores, and they don't have great stock. I suppose it's hard to expect them to have a full tank, but at lfs I would like to see at least a gallon, even if it's just an old milk jug.
That all said, does anyone have any recommendations for where to get a healthy betta? I'm not really looking for one, but I'm just sort of curious. I know a breeder will probably have the healthiest stock, but I don't really know of any. Also, I wouldn't want a super fancy/expensive one necessarily. The "style" they have at the stores are fine, they are just not well cared for. Perhaps ask a breeder for some "extra" fry that aren't fancy enough to breed or sell at high prices?
Brian