Gmpirate, we deal with this issue day in and day out, and in my experience, Bo's answer could not have been more accurate.
So what your dealer is telling you may not be smoke and mirrors, but more of a cautious approach to what they believe will work with the software. Whether it was Aloha, or the lack of standardization among hardware vendors, I've seen my share of flakely problems with Aloha and off-the-shelf hardware. It's gotten better, and by no means do you need to buy Radiant-only. But as Bo said, you might save a few bucks here and there, and sometimes you might loss your a$$. It's a role of the dice, like so many things, and could go either way.
There are a number of well-priced internet companies that sell POS hardware. Though I am not an Aloha dealer, I have been servicing Aloha for 5 years. And in the vast majority of cases, after 30 days, the sellers wash their hands of it. You are dealing with the manufacturer then, which can be a real pain, especially if it's something your business is counting on. Again, like Bo said, throw in shipping costs, downtime, etc, and suddenly it doesn't seem so cheap anymore.
The most common area we saw this with, was Aloha file servers. There is considerable labor setting one up, and obviously we try to supply a solid, open architecture computer. However, with the drop in price of PCs thanks to Dell, customers see these $399 PCs and what to know why ours is so much. Because we know people are suspicious and don't expect straight answers (just as you stated), we've tried NOT to make it a policy to say "you can't provide your own computer, we won't do it." But we strongly discourage it. Too many times, I've seen customers provide older or cheaper PCs to be used as file servers. When the computer acts flakely, or for some reason can't be used---they've racked up close to what they would have paid for new PC by way of labor costs, but all they have for their efforts is a unreliable computer. When they realize they've made a horrible mistake, they finally give in and ask for a new one... and in many cases, expect a "break" on the price because they made a poor decision and went against our recommendation. Now we make them sign a waiver, which says we can't are not responsible for the performance. All we can do is warranty the software changes we've made... that they are done correctly, etc, to run Aloha.
Bo also mentioned the learning curve. If the terminal we sold you has a problem, we're familiar with them. Odds are, I can have it fixed or at least diagnosed, in a matter of minutes. Not so with something I am unfamilar with. And the learning curve translates into money out of your pocket.
People see our prices and forget than in most cases, if that item goes down on Friday night within 6months to 1 year from when we sold it to you (depending on the warranty), we'll send someone out to provide a loaner and fix it. That's service... that's what your paying for.
