All that the auto dealers are going to do with this effort is draw attention to this cool new car. Sure, they might succeed in banning them in a state or two (which is ridiculous), but in the end any publicity will benefit Tesla and hurt the dealers (disclaimer: I am not a marketing professional).

EDIT: To clarify my vague statement above, I meant "banning" the Tesla display store business model, not banning Tesla altogether. That's a much more unlikely outcome, although I'm sure they would if they could.