Glock 18 or Other Full Auto Handguns: Does it have a use?

[dogtown tom]

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I don't think its a myth, more of a difference in point of view. If I remember right, the "hobby dealers" (aka kitchen table dealers) were ALREADY legal, complying with applicable local business and zoning laws as well as the FFL requirements.

Well, no.
ATF has always been clear that the 01FFL Dealer license is for engaging in the business of dealing in firearms...…"hobby" isn't mentioned and neither is
"kitchen table". BTW, there are more "kitchen table dealers" than there are those with brick & mortar retail storefronts.

ATF doesn't care where the dealer conducts business as long as he is operating legally. At least once a week I'll run across someone who says "ATF doesn't allow kitchen table dealers!". Clearly they do as ATF regulations do not prohibit a home based business.

ATF wasn't very interested in doing actual on site premises inspections, instead doing the majority of initial interviews over the phone. At some point ATF noticed that many dealers weren't abiding by Federal law and had lied on their applications. If the licensee was in compliance with ATF regulations and all federal, state, local laws he didn't lose his FFL. The actual number of revocations was miniscule compared to the number who chose to not renew their FFL because they didn't want or could not comply with the law.

What eliminated those guys who A)mostly did it for personal enjoyment,

But "personal enjoyment" doesn't eliminate anyone.....I personally enjoy operating a small business after school. It is clearly stated on the application that an 01FFL will not be issued for enhancing ones personal collection. For that you would need an 03FFL "Collector of Curios & Relics"

and B) operated on very small profit margins was the Clinton administration raising the price of the FFL license from $30 to $300 a year.

You are horribly misinformed.
In 1986 the license fee was $10 per year for all types of FFL's.
Since 1986, the 01FFL Dealer application fee is $200 FOR THE FIRST THREE YEARS and a whopping $90 for each three year renewal after that.

Any "dealer" who can't handle that probably has no business being in business.

They (mostly) didn't go out of the business rather than "get legal" they went out of business because the increase in the license fee cost them more than they were making. (added sufficient expense to negate their slim profits)

I'm sure the idea of having to get a business license, a sales tax permit and actually begin remitting $$$ to their state comptroller was a bigger financial hit than the paltry FFL renewal fees.