LX7 for $299, is there an issue???

At $299 I doubt they are making an profit on it at all.  If anything, they are probably losing money on it.  That's a firesale price.  Companies do that to limit losses.  Panasonic has a gross margin of about 26% across the company.  But let's even assume a huge gross margin like what Apple gets on the iphone of 50%.  Based on the MSRP of $500, they would have to sell for at least $250 to break even on the cost to make it.  What the retailers and distributors make come out of that $299.  Add in overhead at Pansonic, marketing, etc, etc and even at $299 Pansonic is losing money on it with generous 50% gross margin assumption.  More likely the gross margin is closer to 26% and thus Panasonic is losing money at $299.

The reason is simple.  At full MSRP of $500, it can't compete with the RX100.  I don't think they are trying to deny sales to the RX100 as they are trying to cut losses.  Better to lose less money than to lose more.