There's Costco's bulk lots and then there's manufacturers's bulk lots :-)
The economies of scale in producing the raw material will likely mean that its price will drop a bit, but the guy buying 5 tons a month will always get a much better price than the guy buying 5 lbs a month. Even if there are 50 million guys doing the same thing.
The price each individual pays approaches that of the manufacturer, enough to make this a viable alternative. This is nothing new.