In theory, a small general type store serving a small community could make a lot of sense. In practice however, they tend to be fairly depressing to shop in because they're just barely maintained by the one employee who's harried to stock shelves and clean between ringing up customers.
There are other issues with Dollar General too. For one thing, profits don't stay in the local community as they would if you were shopping at a mom and pop. And, just like Walmart, they can easily undermine competition by lowering their prices temporarily.