"I vaguely (very vaguely) recall something to the effect that MontBell's earlier withdrawal involved a bankruptcy of sorts. I wonder if there's 'bad blood' between these two companies???"
I think the key is that the two are not "companies" to each other so much as "competitors" now. I've asked about whether REI carried gear from Montbell and the response was based moreso on marketing than any thing else. Montbell views REI (and I supsect vice versa) as a competitor, particularly since REI has made tremendous inroads in the last decade to build a brand that produces gear that rivals big name competitors. Look at the quality of REI's new lightweight raingear, the Quarterdome Tent, the increased durability of their new lightweight pack line, and so on. In the past REI was a company that carried big name gear with a few OK-quality-but-heavy house items bearing the REI label. This has changed, at least in relation to other brands like The North Face, Mountain Hardwear, Sierra Designs, even Gregory Packs (at least in terms of weight, if not comfort).
While compared to the superhigh quality per weight of the cottage industries, REI comes up short, but REI is not realistically competing with this market. To carry Montbell goods would be equivalent (in terms of marketing, not quality) to carrying EMS or LL Bean items within the store. It simply isn't going to happen. It might also be remembered that REI opened a major store in Tokyo in the 1990's. It is the only store which has gone under in the chain's history to my knowledge. Different habits for different cultures. But don't expect to see Montbell in REI. I've actually heard Montbell referred to as "Japan's REI".